Indian billionaire entrepreneur Mukesh Ambani-led Reliance Industries has announced it will acquire popular retail, wholesale, and logistics and warehousing business of Future Group in a deal valued at Rs 24,713 crore ($3.38 billion), including debt.

Like many other retail chain owners, Kishore Biyani-promoted Future Group's business has been affected by a slowing economy and the coronavirus pandemic.

"Reliance Retail Ventures Ltd (RRVL), subsidiary of Reliance Industries, will acquire the retail and wholesale business and the logistics and warehousing business from the Future Group for a lumpsum aggregate consideration of INR 24,713 crore," the Reliance Industries said in a statement on Saturday night.

Through the deal, Reliance will acquire Future Retail that owns the Big Bazaar that sells a wide range of goods from groceries to cosmetics and apparel and Future Lifestyle Fashions Ltd that operates fashion discount chain Brand Factory.

The Reliance-Future deal is set to escalate the war in India's retail sector. Amazon has already pledged to invest USD 5.5 billion in the country, while Walmart bought local e-commerce giant Flipkart in 2018 for USD 16 billion.

Even though Reliance will take over Future Consumer Ltd, which sells food, home and personal care products, Future Group's financial and insurance business is not part of the deal.

While Reliance Industries has bought out all of the promoter stake in Future Retail and Future Lifestyle Fashions - the two firms that hold the Future Group business, it was not immediately clear what happens to Amazon's holding in the Future.

In August last year, Seattle-based Amazon took an indirect stake of 1.3 per cent in Future Retail as a result of purchasing 49 per cent of Future Coupons Ltd. This investment allows it to buy into Future Retail after a period of between 3 and 10 years.

Retail contributes about a fourth of RIL's revenues.

Investment from Reliance, India''s most valuable company, would help Future's founder Kishore Biyani pare debt. The deal may, however, risk Future's tie-up with the US online shopping giant Amazon.