In August this year, Amazon proposed to acquire a 49% stake in a unit of Kishore Biyani owned Future Group which owns 7.3% of Future Retail, giving the US-based company a 3.58% stake in the retailer which operates more than 1,500 stores in the country. Future Retail runs 290 budget department and grocery stores branded “Big Bazaar”.
The deal would help Amazon tap into the booming retail market in India as it separately boosts its e-commerce operations, offering everything from electronics to groceries on its Indian website.
Competition Commission of India (CCI) – India’s anti-trust body has sought more information from Amazon.com Inc about its planned acquisition of the stake in Future Retail. In a notice issued to Amazon last month, the CCI said that in certain overlapping segments and areas of operation of the parties, the combined market share exceeds the threshold specified in the combination regulations.
When queried about the procedure, Amazon adopted to seek approval. Amazon had notified the CCI through a so-called Form I, instead of a Form II that is more onerous and is required when parties assess the combined entity will exceed a pre-defined market share threshold. The CCI had sent additional queries to Amazon, calling it part of the regular deal approval process by the watchdog. These queries suggest that the deal is being closely scrutinized leaving no scope for anti-trust concerns.
According to Amazon's notification available on the CCI's website, the company believes that the deal is "not likely to cause an appreciable adverse effect on competition" in India.