Markets

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

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

The Bentonville, Arkansas-based retail major is expected to pump in over $12 billion in Flipkart for a majority stake in the company and this investment is likely to value the Indian unicorn at $18-20 billion.

No final confirmation has, however, been made by any of the parties involved in the deal.

Most of Flipkart's large investors, including Tiger Global, Accel, Microsoft, Naspers and eBay, remain on Flipkart's capitalization table, although Tiger Global and Accel-Flipkart's two earliest investors-have sold a small portion of their holdings from their earlier funds as part of this deal.

One of the persons said possible scrutiny from the Competition Commission of India (CCI) as well as risks related to sharing competitive data as part of due diligence were some of the reasons for Flipkart investors and management favouring a deal with Walmart and not Amazon, even though the rival's bid was slightly higher.

Update: Flipkart's board has reportedly approved a deal for Walmart to acquire 75% of the Indian e-commerce company.

Alphabet Inc. may be contributing $3 billion to the investment.

CA still in the dark over Australia v India day-night test
Discussions about the start time are still ongoing between Cricket Australia and the Board of Control for Cricket in India (BCCI). The two-Test tour against Sri Lanka concludes at Manuka Oval in Canberra in a match to be staged from February 1 to 5.

SoftBank has already given the green signal for the deal.

That would seal a Walmart triumph over Amazon.com Inc., which has been trying to take control of Flipkart with a competing offer.

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. Both forged a partnership in the United States previous year where Walmart products are sold on Google Express, the tech giant's online mall.

If the deal in India gets fructify according to present scenario then Google and Walmart will replicate their business synergies in India on the lines of the US.

"Flipkart is key to a global e-commerce strategy", said Arvind Singhal, chairman of the New Delhi-based retail consultancy Technopak Advisors. The Bansals together own around 10 per cent stake in Flipkart, which makes them collectively worth around $2 billion. While Kalyan Krishnamurthy will continue as Flipkart's CEO, the company's founder, Sachin Bansal will probably be stepping down.

Last year, SoftBank Vision Fund had pumped in an estimated Dollars 2.5 billion in Flipkart for about 20 per cent stake in the company. Amazon is out of the running unless Walmart hits unforeseen trouble.


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