Breaking: Walmart acquires 77% in Flipkart for $16 billion
Walmart acquires 77% stake in India's Flipkart for $16 billion
New Delhi, May 9: In a big development Walmart acquires 77% stake in India's Flipkart for $16 billion.
The news of was doing the rounds when SoftBank CEO Masayoshi Son had confirmed US-based Walmart was buying India e-tailer Flipkart. The Walmart-Flipkart deal was sealed on Tuesday night (Japan Time), Son said on a conference call after SoftBank reported earnings, adding that its investment in the Indian online marketplace had almost doubled.
The story so far:The deal, likely to value Flipkart roughly at $18-20 billion, is likely to be the US retail giant's biggest acquisition, NDTV reports.Google parent Alphabet Inc is likely to partner Walmart in the deal. Walmart is likely to own a roughly 60 per cent stake, while Alphabet will get about 15 per cent ownership of Flipkart, the report said, citing sources.The deal, which will see some of the biggest investors in Flipkart offloading their stake in the country’s largest e-commerce company, could be announced any day now, sources with direct knowledge of the development said.Japan’s SoftBank Group Corp and Tiger Global Management are said to be selling almost all of their about 20 per cent stake each in Flipkart. Walmart will likely end up with 60-80 per cent of Flipkart, valuing the company at about USD 20 billion, they said. Flipkart was valued at about USD 12 billion last year, according to researcher CB Insights.The deal will help the US retail giant - which has seen consumers migrate to online platforms like those run by Amazon - get a foothold in the world’s fastest growing economy with a market of 1.3 billion people. The Flipkart model would help the bricks-and-mortar retail giant to take on its global rival Amazon.For Flipkart, the deal would give it additional capital and retail muscle to fight Amazon. Together, Flipkart and Amazon control majority of India’s USD 30 billion e-commerce market that is forecast to grow to USD 200 billion by 2026 (Morgan Stanley estimate).E-mails sent to Walmart and Flipkart remained unanswered. A SoftBank spokesperson, in an e-mailed statement, said the company does not comment on ongoing discussions or speculations.