Mukesh Ambani's Reliance offers Amazon $20 billion stakes in retail arm: What we know

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Reliance Industries is offering to sell about $20 Billion in its retail business to Amazon. The e-commerce retailer held discussions about investing in Mukesh Ambani's company and has expressed interest in negotiating a potential transaction.  According to a Bloomberg news report, Reliance is willing to sell as much as a 40 per cent stake in the subsidiary to Amazon. The news follows a $1 billion (roughly Rs. 7337 crores) investment announced Wednesday by Silver Lake Partners in Reliance Retail, which runs more than 10,000 stores selling apparel, groceries and electronics across India.

Mukesh Ambani's Reliance  offers Amazon $20 billion stakes in retail arm: What we know

1. The deal could be Amazon’s way of acknowledging that it needs a locally-entrenched partner with a strong on-the-ground presence. 
2. Reliance would provide Amazon with a brick-and-mortar component to its ambitions in a country where online purchasing still accounts for a minuscule share of an estimated $1 trillion retail market.
3. The e-commerce company has not made any final decision on the size of its potential investment, and talks could still fall apart. 
4. A deal with Amazon would give further credence to Ambani’s ambitions to create an e-commerce giant for India akin to China’s Alibaba Group Holding Ltd. 
5. Reliance Retail already lured about $1 billion from Silver Lake Partners, while U.S. private equity firm KKR & Co. is in advanced talks to invest at least $1 billion, and L Catterton is also considering investing, Bloomberg News reported Wednesday.
6. The investment in Ambani’s retail ventures comes after he raised $20 billion selling stakes in his technology venture -- Jio Platforms Ltd. -- to investors including Facebook Inc. and Google.