Future Group stocks surge 20% after India suspends 2019 Amazon deal

Shares of India’s Future Group companies surged about 20% on Monday after the country’s antitrust agency suspended Amazon.com Inc’s 2019 deal with the group, potentially making it easier for Reliance Retail to buy Future’s retail business.

The regulator ruled that the U.S. e-commerce giant suppressed information while seeking regulatory approval two years ago for its $200 million investment in Future Group, India’s no. 2 retailer.

Amazon has for months successfully used the terms of that deal to block Future’s attempts to sell retail assets for $3.4 billion to a unit of Reliance Industries Ltd, Amazon’s biggest rival in the Indian retail space.

The Competition Commission of India (CCI) said Amazon will be given time to submit information again to seek approvals, but a person with direct knowledge of the matter told Reuters that Future was unlikely to cooperate with Amazon if it tries to reapply for antitrust clearance.

Amazon, Reliance and Future did not immediately respond to Reuters requests for comment on Monday. Amazon had said on Friday it was reviewing the order “and will decide on its next steps in due course.”

Amazon is likely to challenge the ruling in coming days, people familiar with the matter said.

“Investors in Future have a morale booster now. With CCI getting into the matter, there is a strong indication that Future’s deal with Reliance may go through with fewer troubles, even though some challenges may be brought forward,” said Gaurav Garg, head of research at CapitalVia Global Research.

Future Retail, Future Consumer, Future Enterprises and Future Lifestyle Fashions climbed nearly 20%.

Reliance Industries shares slid 2.7% amid a broader market selloff.

Future Retail shares had surged after its Reliance deal was announced in August last year, but have lost around a third of their value as Amazon mounted challenges.