The Competition Commission of India has asked for details from private equity firm Samara Capital on the role of online retailer Amazon and how its proposed acquisition of More supermarkets would be compliant with the revised foreign direct investment (FDI) policy in e-commerce.

More supermarket chain is owned by Aditya Birla Retail Limited (ABRL). The Indian Government’s Department of Industrial Policy and Promotion (DIPP) issued revised FDI policy on 26 December 2018.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

Two senior industry executives with knowledge of the matter told The Economic Times that the watchdog’s queries to Samara Capital-owned Witzig Advisory Services were related to the role of the online retailer in More’s daily operations. This is in addition to information on its representation on the board and if More would be integrated into the Amazon India marketplace.

The watchdog also sought the structure of the proposed deal and how it would be in line with the revised FDI rules.

“In September 2018, the Samara unit signed an agreement to purchase ABRL for around Rs42bn.”

According to the executives, Samara subsidiary Witzig is yet to file its responses.

Executives told the financial daily that the latest norms may make it difficult for Amazon to increase its link between its India marketplace and the supermarket chain.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Currently, the government allows 51% FDI in multi-brand retail and 100% FDI in the marketplace concept of online retailing.

It was reported in September 2018 that a consortium of Amazon and Samara Capital were set to purchase supermarket chain More from ABRL.

Two executives familiar with the matter were then cited by The Economic Times as saying that the investment bank Goldman Sachs opted out of the consortium.

One executive told the publication then: “There was no space for Goldman in the deal since Amazon wants 49%, which is little short of the permitted 51% in multi-brand retail FDI.”

With an enterprise value ranging between $576.94m and $591.03m, the More sale is expected to assist ABRL in clearing its entire debt.