Walmart to Buy Majority Stake in Flipkart for More Than $12 Billion

Numerous reports in recent times stated that Walmart is looking to buy a majority stake in India’s leading e-commerce portal Flipkart. Today, a new report published by Bloomberg cites that Walmart is close to finalising the deal of acquiring a major stake in Flipkart for at least $12 billion. The necessary agreements for the same will be completed in the next two weeks, as per the people familiar with the matter. It is also revealed that all the major Flipkart investors are now on board with the Walmart purchase. Earlier, Amazon also tried to purchase a stake in Flipkart, but now, Flipkart’s board is ready for Walmart’ stake purchase.

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“Tiger Global Management will sell nearly all its 20% stake in Flipkart, while SoftBank Group Corp. will sell a substantial part of its 20%-plus holding, the people said. Walmart will likely end up with 60% to 80% of Flipkart, which will be valued at about $20 billion,” reported Bloomberg.

And the key issue post the stake sale will be ‘what happens to Flipkart’s founders.’ “The amount each existing investor sells and the size of Walmart’s final stake still need to be finalised. It’s also possible that terms will change or the talks will fall apart,” persons familiar with the matter told the publication.

The deal, if goes on, will give Walmart a significant lead in one of the fastest growing e-commerce markets across the world. It will be interesting to see how Flipkart will change under Walmart because the latter is the largest retailer in the world, but it’s losing the ground to online retailers such as Amazon.

Furthermore, it’s also reported that Flipkart’s board met very recently to discuss the proposals made by Amazon and Walmart and they’re now in a mindset that the Walmart deal could be closed more easily.

Amazon has recently lost its battle in China and its complete focus in now on the Indian market. But Flipkart’s primary rival is Amazon India itself, and it’s hard to imagine Amazon buying stake in Flipkart.

Flipkart is already the most valuable startup in India and if the Walmart deal goes through, it will be the biggest in the Indian e-commerce history.

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5 Comments on "Walmart to Buy Majority Stake in Flipkart for More Than $12 Billion"

 

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Girish Gowda | BengaLuru
April 23, 2018 12:26 pm 12:26 PM
This is not good in many ways. Online shopping will only increase in the future with some estimates pegging the ecommerce industry at 200 billion dollars in the next 8-10 years. That’s a stunning exponential rise. A substantial part of online customers will buy not just for discounts, but for the ease of shopping without wasting time in shops in the future. Flipkart needs investments for sure, but this was not the way to go about it. Every decision they take now will be dictated by American Walmart. Also, there won’t be another Flipkart in India in the future. Amazon,… Read more »
AU(Airtel User)
April 24, 2018 12:57 am 12:57 AM

Its better then chinese investing into it like in paytm case and snooping all over india. Americans, Japnese any non-chinese is good but not chinese investor.

Sandeep Bansal, Manipal
April 24, 2018 12:26 am 12:26 AM

At the end, it doesn’t really matter; Indians are usually not much interested in investing in things other than a few tested waters…
Such ideas need huge investments which are willingly supported by most American biggies…
It’s an era of globalization…

dragonmonk
April 23, 2018 3:02 pm 3:02 PM
How is the situation with FlipKart any new? It was not owned by Indian investors even now (before acquisition by Walmart). Majority investors are Tiger Global from Singapore and Soft Bank from Japan. Even before that, FlipKart is not even registered in India. Legally, it’s a Singapore-based company. Why? Because the Indian laws – even after all these years of speeches by politicians – are still not conducive to starting a new business. And there are very few Indian investors who invest in risky startups (unlike in US etc). So, it’s no wonder that we don’t have any new and… Read more »
Frustrated Indian
April 23, 2018 2:20 pm 2:20 PM

Exactly!

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