Published: Fri, May 04, 2018
Money | By Bruce West

Flipkart co-founder Sachin Bansal likely to quit after Walmart's deal

Flipkart co-founder Sachin Bansal likely to quit after Walmart's deal

The development assumes significance as U.S. retail giant Walmart is close to sealing its deal to acquire majority stake in Flipkart. The deal, which will see the United States retail giant buy around 73 per cent of the Indian e-commerce company, was finally sealed on Thursday following months of negotiations.

That would seal a Walmart triumph over Amazon.com Inc., which has been trying to take control of Flipkart with a competing offer. With investment from large corporates like SoftBank and potentially Walmart, if the deal happens, Flipkart will have more firepower for its battle with US-based Amazon.

Flipkart has raised a whopping $6.11 billion till date since 2009 through 14 rounds of funding.

Bloomberg reported earlier on Friday, citing unnamed sources, that Flipkart's board had approved a deal to sell a stake of about 75 percent in the company to a group led by US retail giant Walmart for about $15 billion.

Flipkart's co-founder Sachin Bansal might take an exit from the firm after the much-talked about Walmart's takeover.

Walmart would maintain a focus on the grocery market, said the sources, suggesting that nearly 50% of Walmart's initial investment would be funneled into building a food and grocery supply chain. Flipkart is yet to confirm the deal. A person familiar with the matter told Reuters that the probability of a Flipkart-Amazon deal was low, and that such a deal may spark competition fears as Flipkart and Amazon dominate India's e-commerce market.

Bloomberg also reported that Major shareholder, Softbank will sell it's 20% stack in the company.

Flipkart declined to comment on the story.

Mint reported on 2 May that Walmart, the world's largest retailer, is in final negotiations to buy a majority stake in Flipkart even as a rival combination of Flipkart and Amazon looks increasingly unlikely.

Last year, there were rumours and speculations that Flipkart would buy Snapdeal, but the deal officially ended around mid-2017.

At present, Bansals reportedly claim to own 5.5 per cent each in Flipkart.

Under the proposed deal, SoftBank will sell its 20%+ stake as part of the transaction through an investment fund at a valuation of roughly $20 billion, while Google-parent Alphabet is likely to participate in the investment, said the report citing people privy to this development at Flipkart.

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