Walmart is expected to announce its much-anticipated deal to acquire a majority stake in Indian e-commerce player Flipkart by the end of this week, despite reports that rival Amazon tried to disrupt the transaction. The global retail titan is said to purchase the 75% of Flipkart for about USD 15 billion according to various media reports. The deal will likely value the e-commerce platform at USD 20 billion. Walmart will invest in Flipkart in partnership with Google parent Alphabet to buy up to 75% for an online retailer, two sources familiar with the matter said, declining to be named as the talks are private.
Bentonville, Arkansas-based Walmart will acquire about a 60% stake in Flipkart, while Alphabet will get a roughly 15% stake for about USD 3 billion, one of the sources revealed.
Previous Reuters report indicated the US grocery store chain was in advanced talks to acquire 51% or more of the e-commerce player for $10 billion to $12 billion (estimated Rs 67,200 crores to Rs 80,700 crores), valuing Flipkart at some $18 billion to $20 billion (estimated Rs 1.21 lakh crores to Rs 1.34 lakh crores).
Both the sources revealed that Flipkart Group Chief Executive Binny Bansal held a closed-door meeting with firm’s top leadership at its Bengaluru headquarters on Monday. One of them added that as part of the deal, Flipkart’s co-founder and executive chairman Sachin Bansal would completely exit, selling his 5.2% stake.
Flipkart was founded back in in 2007 by Sachin and Binny Bansal, both former Amazon employees and just like their US rival began by selling books. The Flipkart group now includes fashion portals Myntra-Jabong, payments unit PhonePe and logistics firm Ekart.
After the deal, while Sachin Bansal will exit, Krishnamurthy and Binny Bansal will remain in their current roles, the two sources revealed. Also, Walmart India and Flipkart will continue to maintain distinct brands after the deal goes through.
Flipkart will also hold a town hall for employees on Friday, and Walmart CEO Doug McMillon likely to attend, one of the sources said to Reuters. Other top Walmart executives will be present in India for the announcement, another source revealed to Reuters. This means the deal is likely imminent this week itself. Flipkart, Walmart, Alphabet, however, failed to respond to requests for comments.
