Walmart takes over Flipkart in deal worth $18-$20 billion

09 May 2018, 05:05 PM
Flipkart (Source: PTI)
Flipkart (Source: PTI)

SoftBank Group Co CEO Masayoshi Son on Wednesday confirmed that a deal had been struck to sell its 20 per cent stake in Flipkart, making Walmart a majority-stake holder in India’s largest e-commerce firm.

The deal is the largest yet for Walmart, and the biggest transaction in e-commerce market.

SoftBank invested $2.5 billion in Flipkart through its Vision Fund and now the stake will be worth $4 billion in the deal, Son told a briefing on Wednesday.

Walmart will invest $2 billion in fresh capital in Flipkart and will buy the remaining stake from the company’ existent customers. The value of the total deal is around $18-$20 billion, as per the reports.

Google parent Alphabet Inc will also reportedly pick some stake in the e-commerce firm.

Co-founder Sachin Bansal is also likely to sell his 5.5 per cent stake for $1 billion, as per a leading daily.

However, some of the investors, including the Tencent Holdings and Tiger Global Management, are expected to keep their small part of the stake.

After Sachin Bansal’s exit, co-founder Binny Bansal will take on the role of the Chairman of the Flipkart group, while CEO Kalyan Krishnamurthy will stay on his current role, as per reports.

The deal has prompted Amazon to ramp up investments in India, with the company injecting Rs 2,600 crore in its Indian unit to strengthen its war chest against its top rival Flipkart.

“As India’s fastest growing e-commerce player with a long-term commitment to make e-commerce a habit for Indian customers, we continue to invest in the necessary technology and infrastructure to grow the entire ecosystem,” said an Amazon India spokesperson to a leading press agency.

First Published: Wednesday, May 09, 2018 03:51 PM

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