In a huge merger on Thursday, reports suggest that United States retail giant Walmart Inc has signed a deal to acquire 73% of controlling stakes of Indian e-retail company Flipkart - a deal that will likely prompt the exit of Flipkart's co-founder Sachin Bansal.
The buyback also appears to be the first somewhat public confirmation from Flipkart of its current sale talks with Walmart, which will buy at least 55% of Flipkart in a deal that will value the company at $20-21 billion.
Walmart Inc.is seeking to acquire Flipkart with a 73% stake in the company, according to a report from FactorDaily.
A Walmart-Flipkart deal could lead to more intense price competition, retail consultants said. A final close is expected within 10 days, though terms could still change and a deal isn't certain, they said.
Walmart would maintain a focus on the grocery market, said the sources, suggesting that nearly 50% of Walmart's initial investment would be funneled into building a food and grocery supply chain.
India is a critical market for both Walmart and Amazon and a deal with Flipkart would help either player in consolidating their position in the booming e-commerce market here.
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That would seal a Walmart triumph over Amazon.com Inc., which has been trying to take control of Flipkart with a competing offer. His co-founder, Binny Bansal (no relation) would stay on-according to this report, Walmart only wants one of the co-founders to hang around.
The logo of India's largest e-commerce firm Flipkart is seen on the facade of the company's headquarters in Bengaluru, India July 7, 2017. Even as Sachin's exit from Flipkart looks imminent, Walmart is holding on to Kalyan Krishnamurthy, the web retailer's present CEO, sources said. Amazon is out of the running unless Walmart hits unforeseen trouble.
SoftBank declined to comment.
Amazon said it does not offer comments on rumours and speculation, and Flipkart did not immediately respond to a request for comment. The U.S. retailer has been working to win over the Indian company since at least a year ago.
Flipkart's other investors, like Tencent, Microsoft and Tiger Global aren't looking to cash out just yet.
Next comes the Accel Partners, which has already clocked $113.5 Mn through partial exits from Flipkart. That stake could be worth more than $4 billion at the Walmart deal's valuation.