CCI approves Future Group-Bharti Retail merger deal

Competition Commission of India (CCI) has cleared the proposed Rs 750 crores multi-tier merger deal between Future Group and Bharti Retail, announced in May this year. Future Group promoters would hold 46-47 percent stake each of the two new entities and the rest would be with public shareholders.

Under the all-stock deal, Future Retail would demerge its retail business which would then be merged into Bharti Retail, while the latter's retail infrastructure business would also undergo a similar process to be merged with Future Retail. Bharti Retail would get about 15 percent stake in both the merged entities and Rs 500 crores worth stocks, representing 9-10 percent equity in both the companies and Rs 250 crores in the form of optionally convertible debentures.

The deal is expected to lead to the creation of Rs 1,500 crores retail giant, having 570 stores in 243 cities. As competition heats up among ecommerce majors, physical retailers as well as among online and offline retailers, this step would give a much needed fillip to Future Retail against its competitors.