Adnan Abid/Reuters
- Reliance Industries has offered to sell Amazon a 40% stake in its retail arm in a deal that could be worth $20 billion, a source told Bloomberg News.
- Reliance Retail is India’s largest retailer, and owns more than 11,000 stores.
- It also owns e-commerce platform JioMart, which is a growing threat to Amazon in India.
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India’s largest company, Reliance Industries, has offered to sell 40% of its retail arm to Amazon for around $20 billion, Bloomberg News reported.
This deal would be one of Amazon’s largest-ever investments. Reliance Retail owns e-commerce platform JioMart, a major, fast-growing rival to Amazon in India.
In June, Amazon was reportedly considering buying a 9.9% stake in Reliance Retail, India’s largest retailer by revenue. This followed an August 2019 report that said Amazon might acquire a 26% stake.
Bloomberg’s report, which cites a personal familiar with the matter, says no final decision has been made on the potential deal, and a Reuters report named Saudi Arabia’s Public Investment Fund (PIF) and Abu Dhabi state fund Mubadala Investment Company as other potential buyers.
Reliance Retail owns more than 11,000 stores, including convenience shops, supermarkets, apparel, and electronics. Most are in India, but it also owns Hamleys in London – the oldest and largest toy shop in the world.
It turned over around $20 billion in the year to March 2020, an increase of 27% on the year before.
Reliance has recently expanded into online grocery delivery. In May 2020, it launched JioMart from its subsidiary Jio Platforms, and it plans to expand beyond groceries, which would make it even more of a threat to Amazon. Amazon's investment in Reliance Retail could allow it to collaborate with JioMart, rather than compete.
Reliance Retail is a subsidiary of the conglomerate Reliance Industries, which has businesses in the energy, petrochemicals, textiles, natural resources, and telecommunications sectors.
It is led by billionaire Mukesh Ambani – Asia's richest man, with a $72 billion net worth.
Reliance has already raised $20 billion of investments so far in 2020. This includes Facebook investing $5.7 billion investment into its mobile internet service, Jio Platforms, in April. This was followed by a $4.5 billion investment from Google in July — and together, Google and Jio have announced plans to produce and sell more than 100 million low-cost smartphones in India to compete with Chinese firms.
Reliance Retail also announced its acquisition of rival Future Group's retail arm in August, for $3.38 billion, and on Wednesday announced a $1 billion investment from US private equity firm Silver Lake Partners, which took a 1.75% equity stake.