Flipkart reported to have approved $15bn stake sale to Walmart-led group

04 May, 2018, 13:53 | Author: Lora Ball
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The Walmart-Flipkart deal has ruffled a lot of feathers but despite the turn out, the company's biggest investor, SoftBank, will be leaving the foray.

This would still leave biggies like Tiger Global, Accel, Microsoft, Naspers and Ebay on the deal table, it said adding that Flipkart's holding company is now a private company - Flipkart Pte Ltd. "Binny and Krishnamurthy have backed the deal with Walmart and the two are seen leading the final negotiations, which will likely result in a share purchase agreement by Walmart by early next week, ' another person close to the deal said".

The rival company Amazon has also made a counter offer to buy 60 percent stake in Flipkart.

The acquisition of Flipkart has been a long-drawn out saga that has kept the Indian e-commerce space on edge, but it seems that a deal has finally been finalized.

Walmart shares closed 0.13 percent lower Thursday on the New York Stock Exchange, while Amazon stocks closed higher by 2.39 percent on Nasdaq.

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Walmart's investment would give Flipkart not just additional funds to fight Amazon, but also arm it with a formidable ally with extensive experience in retailing, logistics and supply chain management. India is the next big potential prize after the USA and China, where foreign retailers have made little progress against Alibaba Group Holding Ltd. "Walmart clearly doesn't want to be left behind in the race as India is a critical piece".

Amazon said it does not offer comments on rumours and speculation, and Flipkart did not immediately respond to a request for comment.

Amazon has already been aggressively expanding in the country on its own. The companies are each other's rivals in the USA as well.

Walmart is eyeing to take a controlling stake of 51 per cent or more in Flipkart. Walmart is merging Asda with the British retailer J Sainsbury Plc and will retain a 42 percent stake in the combined company. The deal with Walmart is expected to value Flipkart at about United States dollars 20 billion The deal will involve purchase of primary and secondary shares. According to Forrester Research, India might become a $200 billion market in a decade, making it the most sought after ground now.

SoftBank stands to make a tidy profit on a stake it took only previous year. That stake could be worth more than $4 billion at the Walmart deal's valuation.

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