Come This March End, The Ongoing Flipkart-Walmart Deal Might Get Finalised


Discussions and deliberations that were ongoing for what might be one of the most promising retail deals between Walmart and India’s leading e-commerce company, Flipkart might be finalized by the end of this month, reports Live Mint


This deal, if finalized, would make Walmart a stiff competition to Inc.

Sources that have chosen to remain anonymous have claimed that the Bentonville, Arkansas-based retail giant intends to buy about a third of Flipkart Online Services Pvt, in part by purchasing stakes from Tiger Global Management and SoftBank Group Corp.

The deal would increase the value of Flipkart to about $20 billion from about $12 billion last year.

Stakeholders in the deal have pointed out that it is possible the specifics of the deal might undergo a change or it might so happen that the entire deal is scrapped off. 

What does the deal promise, if finalized?

Walmart is the world’s largest retailer, but it Amazon has proved a stiff competition as consumers increasingly migrate to online retail. India is the next big potential prize after the US and China. Foreign investors have not made much progress against the Alibaba Group Holding Ltd. in the country.

The probable deal of Walmart with Flipkart would also help the Indian startup tackle its own challenge from Amazon.

Founder Jeff Bezos intends to invest $5.5 billion in India and indicated that he will leave no stone unturned in his attempt to lead the market.

While Walmart is still working through the negotiations of its stock purchase, SoftBank, which has made more than $100 billion off of its investment in Alibaba, does not want to give up substantial claims in Flipkart.

Even Tiger Global would like to hold onto at least a small Flipkart stake after the deal is finalized.

It is expected that Flipkart could also issue new shares as Walmart takes its stake.

Tiger and SoftBank are currently the startup’s largest shareholders, followed by South Africa’s Naspers Ltd. That could be the start of a formidable anti-Amazon alliance in the retail market 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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