Reliance Retail Ventures Ltd., a unit of Reliance Industries Ltd., sought the Competition Commission of India’s approval on Monday for its Rs 24,713 crore acquisition of the online and offline businesses of the Future Group, which includes retail, wholesale, logistics and warehousing operations.
“Usually, it is both online and offline. If you see the past orders, you can make out the CCI considers them both together and separately,” the official said.
The first step for the competition watchdog in assessing the deal would be to define the relevant market.
“It depends on how the practice of the commission has evolved. First, a market is defined broadly, for example, the whole of retail. Then it is narrowed down to see if there are overlaps or not,” the official said.
Experts said the CCI may not have a precedent. This is a first-of-its-kind deal where both offline and online businesses are being acquired, said Kanika Chaudhary Nayar, a partner at law firm Luthra & Luthra.
“It’s not like the CCI would have too many past precedents of a similar nature and definitely not a deal where there are so many aspects to examine for the entire supply chain,” Nayar said.
In its filing, Reliance Retail said it is engaged in the business of retail supply chain management while Future Enterprises is engaged in retail, wholesale, logistics and warehousing businesses.
According to Karan Singh Chandhiok, a partner at Chandhiok & Mahajan, the CCI will determine whether the retail supply chain management includes logistics and warehousing.
“If it doesn’t, then the CCI will be less concerned about the overlaps in this market. But since it will help Reliance vertically integrate, it may examine what could be the effect on the structure of the market as a consequence,” Chandhiok said.