Amazon.com Inc is set to snag a 3.58% 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.
The companies 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 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.
It was reported that the deal pegged the Mumbai-based company’s value at about 430 billion rupees ($5.98 billion), more than double its current market capitalization of $2.91 billion.
Amazon and Future Retail declined to comment on the value of the transaction that remains subject to regulatory approval.
The two sides have reportedly been in talks for more than a year.
The deal gives Amazon the right of first refusal should Future Retail’s founder, Kishore Biyani, or his family decide to further trim the 47.02% stake they own in the company, both directly and via entities like Future Coupons that they control.