Amazon in talks to buy minority stake in Spencer’s Retail

31 August 2018 (Last Updated August 31st, 2018 15:28)

US online retail major Amazon is entering talks to acquire a minority stake in Indian retail chain Spencer's Retail in a move to further penetrate the country’s retail market.

Amazon in talks to buy minority stake in Spencer’s Retail
Amazon in talks to buy minority stake in Spencer’s Retail. Credit: Mike Seyfang.

US online retail major Amazon is entering talks to acquire a minority stake in Indian retail chain Spencer’s Retail in a move to further penetrate the country’s retail market.

The retailer also entered talks with Aditya Birla Group to acquire a stake in More supermarket and may team up with Samara Capital and other investors to completely purchase the business, reported Economic Times, citing people familiar with the matter.

One executive familiar with the matter was quoted by the Economic Times as saying: “Talks with Spencer’s on valuation and structure are currently ongoing. They are preliminary in nature, so we can’t be sure that the deal will go through.”

Amazon, through its Indian unit, has submitted a non-binding agreement to buy up to 15% in the Future Group with an investment of $600m to $700m earlier this week.

Amazon is seeking to compete with other major players such as Walmart and Reliance Retail, and if the three deals materialise, these will offer significant interest for Amazon in more than 1,700 stores spread across the country, reported the publication.

In another development, Alibaba-backed Paytm Mall is reportedly partnering with online grocer BigBasket, as well as other regional retailers, in a move to counter Flipkart and Amazon’s Indian unit.

“If the three deals materialise, these will offer significant interest for Amazon in more than 1,700 stores spread across.”

Earlier this week, it was reported that Paytm is set to partner with technology major Google to form a consortium to acquire a 7% to 10% stake in Future Retail with an investment between $49.97m and $57.11m.

Reuters quoted Paytm Mall COO Amit Sinha in an interview as saying: “We are in the process of integrating BigBasket on our app. When we talk about partnerships there will be brand partnerships, there will be retail partnerships, and not only with pan-India retail chains like Big Bazaar, but also with regional, local city-based brands.”

Sinha also noted that, if needed, the company is also in plans to acquire a stake in another retailer or divest stake in Paytm Mall.

Sinha further added: “At least there are three players who are definitely, very clearly there in the long run – Amazon, Flipkart, and us.”