BusinessE-Commerce

Amazon to indirectly buy Aditya Birla Retail’s supermarket chain More

Amazon India suffered a huge blow when Department of Industry Policy and Promotion (DIPP) announced the new FDI policy. It has put all the e-commerce players on the back foot as they have to reform all their plans for the year. Amazon has taken a harsh decision amongst this storm. It has decided to shut down its food retail business to avoid confrontation with the government. The new norms have a lot of guidelines which are very harsh on the e-commerce companies but they will have to comply with it any which way.

That said, Amazon is now looking elsewhere to make up for its lost business in which it had invested around $500 million a year ago. It has now partnered with Samara Capital and is going acquire Aditya Birla Retail’s supermarket chain ‘More’. More has been around for over a decade now and it has been doing okay around the country. Without exaggerating it needed some restructuring over the years but it is doing business good enough to exist in the market.

That said, Samara-Amazon is not going to directly buy More but are going to invest in Witzig Advisory Services which in turn will buy Aditya Birla Retail’s supermarket chain, More. That said, Samara-Amazon had to take care of a lot of things before biting down this deal. They had to go through a lot of regulatory lines before they could finalize it. Competition Commission of India, normally known as CCI, has looked over this deal and have approved of the same.

The organization has understood the motive of the deal and have worked its way through it. They communicated with Witzig and emailed them their decision which just said ‘approved’ without revealing anything else. Witzig which is totally owned by Samara Alternative Investment Fund had decided to acquire ABRL for INR 4200 crore. It had filed an application to CCI for the same. Amazon.com has also dealt with Samara regarding Witzig, Amazon will own 49% of the Witzig and Samara will have control over the company with 51% stake.

However, Amazon has not paid for the same yet. It has been waiting for CCI’s approval and the deals were decided in the month of September in 2018. That said, the Samara-Amazon deal is not totally through yet, they will have to restructure it multiple times because it is still going to be scanned by DIPP. They will have to modify the whole deal and structure if DIPP finds any flaws in it and if they fail to do so, they may be on the lines for some legal action.

-Unmesh Phule

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