Flipkart to sell majority stake to Walmart

Share

Previous Reuters report indicated the United States grocery store chain was in advanced talks to acquire 51% or more of the e-commerce player for $10 billion to $12 billion (estimated Rs 67,200 crores to Rs 80,700 crores), valuing Flipkart at some $18 billion to $20 billion (estimated Rs 1.21 lakh crores to Rs 1.34 lakh crores).

The deal is likely to value Flipkart at upwards of $20 billion, a remarkable turnaround for the company that was struggling as recently as 2016 when rival Amazon overtook it in terms of market share in two consecutive months.

According to a Reuters report, Flipkart will hold a townhall for employees on Friday where Doug McMillon, president & CEO of Walmart Inc, is likely to be present. The Flipkart model would help the bricks-and-mortar retail giant to take on its global rival Amazon. Son's Vision Fund paid $2.5 billion for the stake in the Singapore registered firm that primarily operates in the Indian e-commerce market. Walmart is the potential beneficiary of Flipkart shares' deal.

Walmart is expected to get three seats on Flipkart's board of directors.

In buying Flipkart, Walmart would seek to redress missteps in China, where it initially bought an unprofitable, second-tier online marketplace, then exchanged it five years later for a stake in JD.com, the number-two player behind market leader Alibaba Group Holding Ltd.

Florida deputy airlifted to hospital after shooting in Highlands County
Also, the Sheriff's Office will hold its own candlelight vigil Wednesday at 8 p.m.at Fireman's Field at the Highlands Fairgrounds. Arrest records show Ables had about 2 years left of probation for spraying mace at Dolan's grandfather.

In a letter to Commerce and Industry Minister Suresh Prabhu, the Confederation of All India Traders or CAIT said that the deal should not be allowed till India finalises a policy for the e-commerce sector. "Interestingly, this has led to fresh contention between the retail bigwigs over the Flipkart deal", Zacks Equity Research said in an analysis released yesterday. However, Willmart will retain co-founder Binny Bansal and CEO, Kalyan Krishnamurthy. Others like SoftBank and Naspers are expected to sell out completely, as TOI reported previously. The greatest fear of Amazon was that Walmart will finance their competitor.

There are reports that Walmart has valued Flipkart at $20 billion.

Sachin Bansal, Flipkart's Founder, is expected to sell all his shares. Flipkart, Alphabet, Tiger Global and Accel did not immediately respond to requests for comment. An announcement of Walmart acquiring Flipkart is likely as early as on Wednesday (May 9), said a source with direct knowledge of the discussions.

With Walmart gaining an entry into India with Flipkart, Bezos will be going up against his biggest adversary who not only has the financial muscle but can also give Amazon a run for its money on the sourcing and marketing front. The 11-year brand founded by Sachin and Binny Bansal (unrelated) thus falls into American hands.

Share