Walmart’s Acquisition of Flipkart Likely to Go Through for $15 Billion

Flipkart’s board of directors have finally taken the audacious step and decided that they are ready to sell 75% stake of the company to the US-based Retail giant Walmart for $ 15 billion. This is definitely a big stride from any American company towards investment in an Indian tech company. Anonymous people tipped off on the news to Bloomberg, saying that Google’s parent company Alphabet would also likely back Walmart on this deal and that SoftBank Group Corp. would sell all of its 20-plus percent stake in Flipkart via an investment fund for this deal to go through. The entire transaction would be valued at around $20 billion they said. The tipsters also did not forget to add that even though a final decision can be expected on this deal within ten days, the terms of the deal could still change and in fact, they also added that the entire plan for the acquisition might also crumble down.

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If this deal goes through successfully, it would mean a defeat for the American e-commerce giant Amazon, which has also been trying to get hold of Flipkart’s leadership in an attempt to solidify its position in the Indian online retail sector as the sole winner. It is still a known fact that Amazon stays as the second largest e-commerce company in India after Flipkart. After this decision by the board members of Flipkart, it is much more likely that Walmart is going to win the deal. If Walmart assumes the leadership of Flipkart in India, Amazon might be in for some trouble from a tough competitor.

Walmart, which is the world’s largest retailer has been in a close race with Amazon ever since its inception. The e-commerce giant has drastically affected store sales for Walmart, and with this latest acquisition, the company will look for opportunities to rebuild its reputation in the high-growth market of 1.3 billion people. After China, where sadly for both the companies, Alibaba has irreversibly established its strong-hold, India is the biggest market in Asia which might become a launch-pad for either of the e-commerce giants.

Arvind Singhal, Chairman of the New Delhi-based retail consultancy Technopak Advisors, shared his thoughts on the development saying “Flipkart is key to a global e-commerce strategy,” he also added, “Walmart clearly doesn’t want to be left behind in the race as India is a critical piece.”

When asked further questions about the new investment, SoftBank Group shied away from making any statement in response. Rest of the participants of the deal Flipkart, Walmart and Google also didn’t respond in the fastest way to the question about company’s acquisition.

While Walmart is already in talks with Flipkart to take the deal forward, there is no denying the fact that Amazon still remains as competition to its Indian counterpart. With Jeff Bezos pumping $5.5 billion dollars into Amazon India and under the leadership of the local chief, Amit Agrawal the company has touched superior levels in the country and will probably continue to do so.

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17 Comments on "Walmart’s Acquisition of Flipkart Likely to Go Through for $15 Billion"

 

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Arena
May 5, 2018 10:17 am 10:17 AM

Every ecommerce will loose identity unless they join big players…now only there are visible amazon, paytm mall, flipkart…before many exist but all will loose when these 3 make tradional market errosion with ever lasting cash to burn..

Arena
May 5, 2018 10:03 am 10:03 AM

Amazon, flipkart(Walmart), snapdeal+ paytm mall will join in near future…bcz common major investor Softbank. Now 2 american+ 1 (China+Japan) major parent company investors fighting in India….after Walmart, Softbank will have better clarity on its ecommerce investments arm in India. Before it invested in all rivals..now they don’t.

Prithvi
May 4, 2018 8:46 pm 8:46 PM

Its sad to see Indians working hard and then handing over the golden goose to a lousy American co. like Wal-Mart. Sad day! Will we ever see a fully owned Indian co. ?

Arena
May 5, 2018 8:48 am 8:48 AM

Also why valued much bcz flipkart comes with all these.

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Arena
May 5, 2018 8:46 am 8:46 AM
Lol…its not like that…reality: it is a cash bleeding goose aiming for Indian market dominance, also flipkart never had Indian controlling investment. Here what matters is someone that can afford to bleed cash for GMV. Now Walmart is Amazon rival….also what’s interesting is paytm mall(Softbank, alibaba)…here Softbank investment of 2.5 billion in flipkart last year now values 4.5billion that’s sold to walmart(its 1/4share). Another investors are tiger global, see the list of investors… I didn’t find any Indian majority. Even thought shares holding differ. But all major investments are from abroad. So nothing changes….still kalyan Krishna murthy is the managing… Read more »
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AkashR, WB
May 5, 2018 12:15 am 12:15 AM

I think Infibeam is a fully Indian owned company. Not sure though. I purchase from Infibeam regularly & thier service is pretty good.

Sunny | Lucknow
May 4, 2018 11:08 pm 11:08 PM

Nationalism was turned into a dirty word by politicians who wrecked the country since independence, until that misbelief fully eliminated from the mind of each and every Indian, what you wish isn’t going to happen. We have enough Indians busy digging our own roots unfortunately. Sadly a lot of damage caused to India’s potential is irreversible.

You won’t achieve anything in this world until you’re proud of who you are and of where you come from.

Maratha | Maharashtra
May 6, 2018 12:44 pm 12:44 PM

Nationalism is basically taking pride in the things you didn’t do, hating people you don’t know.

Be patriotic not a nationalist.

In the times of globalisation the concept of Swadeshi has changed. Capital can come from anywhere as long as there are jobs generated in India.

Not one company is fully Indian. You always have foreign capital in some form.

dragonmonk
May 5, 2018 8:19 pm 8:19 PM

@sunny Why limit to country boundaries? You can also be proud of being a human being on planet earth. Don’t celebrate boundaries. Celebrate being a good person leading a kind and decent life.

dragonmonk
May 4, 2018 10:56 pm 10:56 PM

Being a good worker is not the same as being a good entrepreneur. We have lots of good workers. We don’t have a lot of good entrepreneurs… not living in the country at least.

Girish Gowda | BengaLuru
May 5, 2018 12:03 am 12:03 AM

Then move out of China immediately.

Girish Gowda | BengaLuru
May 4, 2018 10:45 pm 10:45 PM

Except Chinese, no one will rejoice an Indian company being bought by an American company. This is such a shame.

dragonmonk
May 5, 2018 8:16 pm 8:16 PM

For the nth time, get it into the thick head that FlipKart is NOT an Indian company. It just happened to be started by a couple Indians.

Girish Gowda | BengaLuru
May 5, 2018 11:26 pm 11:26 PM

That is what Chinese love to say about Flipkart. Keep banging your head into that wall.

dragonmonk
May 5, 2018 8:15 pm 8:15 PM

Don’t you have elections soon in Bangalore too? You should be busy campaigning for the party supporting rapists in Jammu. What are you doing here holding the Chinese flag? Even Chinese people might not be talking so much about themselves as you do.

tri_vis
May 6, 2018 12:20 am 12:20 AM

Without knowing facts, anyone can keep blabbering.
But after truth comes out, that anyone , vanishes in thin air.

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