MUMBAI • Amazon.com is set to snag a 3.58 per cent minority stake in India's Future Retail, which operates more than 1,500 stores in India and owns several supermarket brands, including budget department and grocery store chain Big Bazaar.
Future Retail said in a regulatory filing late on Thursday that Amazon has agreed to acquire a 49 per cent stake in Future Coupons, which in turn owns a 7.3 per cent interest in Future Retail, according to prior filings.
The firms did not disclose the value of the deal, which gives Amazon a stake in one of India's biggest retail chains, whose stores sell everything ranging from clothes to fresh produce.
The transaction valued Future Retail at a "substantial premium" to its existing market price, a source familiar with the matter told Reuters.
The Economic Times reported that the deal pegged the Mumbai-based company's value at about 430 billion rupees (S$8.3 billion), more than double its current market capitalisation of US$2.91 billion (S$4 billion).
Amazon and Future Retail declined to comment on the value of the transaction, which remains subject to regulatory approval.
Future Retail's shares were down 5 per cent at 393 rupees in morning trade in Mumbai, as many investors had expected Amazon to purchase a 10 per cent stake based on previous media reports. "The earlier expectation was that Amazon would invest via a fresh issue, but now the money's going to the promoter and the firm is not benefiting," said HDFC Securities senior vice-president Deepak Jasani.