Thu, May 10, 2018 - Page 10 News List

Walmart to acquire control of Flipkart

ONLINE BATTLE:The deal is to be the largest-ever e-commerce acquisition and pit the US retail giant against in one of the world’s fastest-growing markets

AFP and Bloomberg, MUMBAI, India

Walmart Inc has agreed to buy control of Flipkart Pvt Ltd, according to Softbank Group Corp CEO Masayoshi Son, a major shareholder in the Indian e-commerce company.

The Japanese multinational conglomerate, through its Vision Fund, invested US$2.5 billion in Flipkart and that stake is to be worth about US$4 billion in the deal, Son told a media briefing yesterday.

He did not elaborate on other terms of the Walmart takeover.

The deal values Flipkart at about US$20 billion, people familiar with the matter have said.

US retail behemoth Walmart was yesterday expected to announce that it is to buy a majority stake in Flipkart for about US$15 billion.

Walmart CEO Doug McMillon arrived in Bengaluru, India, where Flipkart is headquartered, to announce the deal, which media reports said would see the US firm acquire about 70 percent of the Indian e-tailer.

Analysts said it would be the world’s biggest-ever e-commerce acquisition and pit Walmart head-to-head against rival Inc in one of the world’s fastest-growing markets.

The deal would deliver a blow to Amazon, which has been expanding aggressively since it entered the Indian market in 2013.

Last week, Flipkart’s board agreed to sell up to 75 percent of the company to a Walmart-led group, according to multiple media reports.

Google’s parent company, Alphabet Inc, is also expected to purchase a small stake, possibly about 10 percent, reports said, citing unnamed sources familiar with the matter.

There have been months of speculation that Walmart was preparing to buy Flipkart, but both firms have repeatedly declined to comment on the talks.

Flipkart is India’s largest e-commerce group on the basis of sales, but has been fighting off a huge challenge from Amazon.

Amazon CEO Jeff Bezos has committed more than US$5 billion to grabbing a big slice of India’s e-commerce pie after failing to make inroads in China.

E-commerce sales in India last year hit US$21 billion, according to market research company Forrester Research Inc, and are expected to soar as its population of 1.25 billion people make greater use of Internet access.

Flipkart was founded in 2007 by former Amazon employees Sachin Bansal and Binny Bansal, who are not related.

Like Amazon, it started as an online bookstore. Flipkart now sells everything from mobile phones, TVs and juicers to running shoes, sofas and beauty products.

Amazon had reportedly tried to scupper Walmart’s deal with Flipkart by negotiating its own purchase of a majority stake.

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