Indian billionaire Mukesh Ambani’s Reliance Industries Ltd. is offering to sell a roughly $20 billion stake in its retail
business to Amazon.com Inc., according to a person
with knowledge of the matter.
Amazon has held discussions about investing in
the conglomerate’s Reliance Retail Ventures Ltd. unit and has expressed interest in negotiating a
potential transaction, the person said. Mumbai-based Reliance Industries is
willing to sell as much as a 40% stake in the subsidiary to Amazon, the person
said, asking not to be identified because the information is private.
A deal, if successful, would not only create a
retail behemoth in India but will also turn Jeff Bezos and
Asia’s richest man from rivals into allies in one of the fastest-growing
consumer markets in the world. At $20 billion, the deal would be the biggest
ever in India as well as for Amazon, according to data compiled by Bloomberg.
Shares of Reliance Industries extended gains and
touched an all-time high after the Bloomberg News story. The stock surged 4.2%
as of 12:08 p.m. in Mumbai. The Indian rupee rose as much as 0.5% to 73.1588
per dollar on expectations of more capital inflows.
In India, where a lot of people still shop in
tiny street-corner stores, the deal could be Amazon’s way of acknowledging that
it needs a locally-entrenched partner with a strong on-the-ground presence. For
Amazon, Reliance would provide a brick-and-mortar component to its ambitions in
a country where online purchasing still accounts for a minuscule share of an
estimated $1 trillion retail market.
Amazon hasn’t made any final decision on the
size of its potential investment, and talks could still fall apart, the person
said. A representative for Amazon declined to comment.
“As a policy, we do not comment on media
speculation and rumors,” a Reliance spokesman said in an emailed response to
Bloomberg News. “Our company evaluates various opportunities on an ongoing
basis. We have made and will continue to make necessary disclosures in
compliance with our obligations.”
A deal with Amazon would give further credence
to Ambani’s ambitions to create an e-commerce giant for India akin to China’s
Alibaba Group Holding Ltd. Reliance Retail already lured about $1 billion
from Silver Lake Partners, while U.S. private equity firm KKR & Co. is in advanced talks to
invest at least $1 billion, and L Catterton is also considering investing,
Bloomberg News reported Wednesday.
The investment in Ambani’s retail ventures comes
after he raised $20 billion selling stakes in his technology venture -- Jio
Platforms Ltd. -- to investors including Facebook Inc. and Google. The
billionaire appears to be seeking to repeat that fundraising strategy with his
retail business.
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