Sources indicated that Amazon, which aggressively competes with Flipkart in the India market, has put in a matching bid along with a $2-billion breakaway fee. Amazon said it does not offer comments on rumours and speculation, and Flipkart did not immediately respond to a request for comment. The Walmart deal would retain Flipkart's existing structure, while Amazon hasn't released details on its plans.
On Wednesday, CNBC TV18 reported that the global e-commerce behemoth has made a formal offer to Flipkart to buy a 60 per cent stake. There were also reports in April that Masayoshi Son, the founder of SoftBank, met Walmart's global CEO to finalize a deal.
A spokesman for Walmart declined to comment.
SoftBank, Flipkart and Amazon did not comment on the development.
For Amazon, throwing its hat in the ring could be as much about derailing Walmart's efforts as it would be about defending its 27 percent market share in India, consultants and investors said.
The Flipkart Group, which includes Myntra and Jabong, has a combined market share of over 39.1% as compared to Amazon's 31.1% in the Indian online retail market, says a recent Forrester Research report.
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The source said on condition of anonymity that a deal could take at least a month to be signed.
Walmart's interest in Flipkart has led to a valuation of around $20 billion for the Indian company.
According to an ET report, the Bengaluru-based online marketplace has put $400 million in its pocket to drop down the number of shareholders to below 50 to be recognised as a private limited company in the Southeast Asian country.
Investors expect faster returns from Walmart's investments compared to Amazon, said Yarbrough, a move that limits the brick-and-mortar retailer's ability to spend big on acquisitions in growth markets.
Further, the American retailer could even end up spending anywhere between $8 billion and $12 billion to buy the stake, the people said. The Japanese conglomerate is ready to deploy this sum to buy shares from smaller investors and help it maintain around 20 per cent stake in the combine with Amazon.
Walmart's shares were 0.84 percent down at $86.67 during afternoon United States trading.