Walmart Inc is in discussions to spend about US$7 billion to become the largest investor in India’s leading e-commerce company, people familiar with the matter said, a move that would put the US retailer in competition with Amazon.com Inc in one of the most promising online retail markets.
The Bentonville, Arkansas-based retail giant plans to buy about one-third of Flipkart Online Services Pvt, in part by purchasing stakes from Tiger Global Management and Softbank Group Corp, said the people, asking not to be identified because the talks are private.
The deal might push the valuation of the homegrown start-up to about US$20 billion, the people said, up from about US$12 billion last year.
Photo: EPA
If completed, the deal would give Walmart a major stake in an emerging e-commerce market of 1.3 billion people. India is the next big potential prize after the US and China, where foreign retailers have made little progress against Alibaba Group Holding Ltd (阿里巴巴).
Walmart’s backing would fortify Flipkart as it faces its own challenge from Amazon.
Amazon founder Jeff Bezos has already pledged to invest US$5.5 billion in India and said he would spare no expense in his attempt to lead the market.
Walmart and Flipkart declined to comment.
Walmart is still working through the negotiations of its stock purchase, the people said.
Softbank, which has made more than US$100 billion from its investment in Alibaba, wants to retain a substantial stake in Flipkart and avoid giving up too much of its existing shares, the people said.
Tiger Global would like to hold onto at least a small Flipkart stake after Walmart comes in, one person said.
Flipkart could also issue new shares as Walmart takes its stake, the people said.
Tiger and Softbank are the firm’s largest shareholders, followed by South Africa’s Naspers Ltd. If the deal goes through, it would be the biggest in the nascent history of Indian e-commerce.
That could add up to a formidable anti-Amazon alliance as Softbank is also close to finalizing an investment in Alibaba-backed Paytm E-Commerce Pvt, the third key player in India’s online retail market.
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