Indian conglomerate Reliance is acquiring the retail, wholesale and logistics businesses of the Future Group for $3.38 billion, the oil-to-telecoms giant announced late Saturday, strengthening its presence in the country's hugely competitive e-commerce sector.
Reliance, which is owned by Asia's richest man Mukesh Ambani, has been locked in battle with US tech behemoth Amazon and Walmart-backed Flipkart for a share of India's lucrative online market, establishing its digital platform JioMart in May.
After spending years battling local mom-and-pop shops for customers, the online retailers are now trying to work hand-in-hand with the smaller stores that dominate India's towns and hinterlands to bring them online.
Future Group owns some of the country's best-known supermarket brands such as Big Bazaar but its founder Kishore Biyani, once known as India's retail king, has struggled in recent years, with the coronavirus pandemic dealing a heavy blow to his empire.
Ambani's daughter Isha, director of Reliance's retail subsidiary RRVL, said the deal would give a big boost to India's retail sector and was "a strong strategic fit" for her company.
"We hope to continue the growth momentum of the retail industry with our unique model of active collaboration with small merchants ... as well as large consumer brands", she said in a press release.
"This will help Reliance retail to accelerate providing support to millions of small merchants in increasing their competitiveness and enhance their income during these challenging times," she added.
The acquisition will bolster Reliance's presence, adding another 1,800 stores to its retail portfolio, which already covers some 11,000 stores in more than 6,700 Indian towns and cities, including wholesale operations.
"Future group is strong on two fronts -- groceries and apparel -- and Reliance can leverage these and add to its strength," Satish Meena, senior forecast analyst at Forrester Research, told AFP.
The deal will allow Reliance "to combine inventory, stores and customers to deliver an online-offline hybrid experience", he said.
News of the sale comes a month after Reliance's competitor Flipkart announced that it had purchased its parent firm Walmart's Indian cash-and-carry Best Price stores, ahead of launching Flipkart Wholesale, its attempt to bring mom-and-pop shops online.