US-based online giant Amazon will acquire 49 percent stake in Future Coupons, a firm owned by Future Group promoter Kishore Biyani. The deal is likely to be valued at about Rs 1500 crore.

Amazon Inc will acquire a 49 percent stake in Future Coupons, a firm owned by Future Group promoter Kishore Biyani, in a deal that will give the American online giant a minority stake in supermarket chain Future Retail.

The deal is likely to be valued at about Rs 1500 crore. Future Retail operates more than 900 stores in India and owns several supermarket brands, including Big Bazaar.

"Amazon has agreed to invest in Future Coupons Limited, which is engaged in developing innovative value-added payment products and solutions such as corporate gift cards, loyalty cards, and reward cards primarily for corporate and institutional customers. This investment will enhance Amazon’s existing portfolio of investments in the payments landscape in India,” the company said.

On March 5, 2019, Future Retail approved the issuance and allotment of 3.96 million warrants to Future Coupons for Rs 2,000 crore. Warrant conversion can be exercised at any time during the period of 18 months from the date of allotment. In April, FRL received 25 percent or Rs 500 crore of warrant issue price from Future Coupons.

In Aug 2019, FRL (and promoter family) entered into an SHA with Future Coupons to allow it to attend board meetings, have key shareholders’ rights, take stake-sale and purchase decisions.

Amazon has been granted a call option as part of the agreement. A call option allows Amazon to acquire all or part of the promoters' shareholding in FRL if allowed by law. A call option is exercisable between the third and tenth years.

The funds from Amazon will give Future Retail ammunition to take on rivals in both the physical and online world. In a bid to strengthen its presence in the physical space and also to take on Walmart, Amazon has been on an acquisition spree in India.

"Pursuant to these agreements, Amazon has agreed to make an equity investment in Future Coupons Limited for acquiring a 49% stake comprising both, voting and non-voting shares. As part of the agreement, Amazon has been granted a call option. This call option allows Amazon to acquire all or part of the Promoters' shareholding in Future Retail Limited (Company), and is exercisable between the 3rd to 10th years, in certain circumstances, subject to applicable law," Future Retail said in a BSE filing.

First Published:Aug 22, 2019 10:30 PM IST