Published: Wed, May 09, 2018
Money | By Bruce West

Walmart closes in on $15bn Flipkart e-commerce deal

Walmart closes in on $15bn Flipkart e-commerce deal

- Early investors New York-based hedge fund Tiger Global and US private-equity firm Accel Partners will sell a majority of their stakes, Reuters reported on Tuesday.

Bentonville, Arkansas-based Walmart and its partner in the deal, Google parent Alphabet Inc, are looking to buy up to three quarters of Flipkart. The deal would value Flipkart at around $20bn.

Meanwhile, Flipkart's co-founder Sachin Bansal will sell his complete 5.5 per cent stake in the ecommerce firm. However, this could not be independently confirmed.

Secondly, whether Flipkart India is allowed to carry forward the losses for the adjustment against income tax payable by the company. Last month Amazon Mr. Bezos said that Amazon.in is "the fastest growing marketplace in India". Despite the onslaught of Amazon India, Flipkart posted a 20 per cent increase in revenues to Rs 19,854 crore in 2016-2017. A SoftBank spokesperson, in an e-mailed statement, said the company does not comment on ongoing discussions or speculations.

Furthermore, CEO of Flipkart Kalyan Krishnamurthy will also continue his participation in Flipkart's operations but won't be taking up a board seat.

South Africa's Nasper Ltd is largest shareholder in Flipkart after SoftBank and Tiger Global. "It remains to be seen how the Flipkart-Walmart deal would be finally structured", Vanvari said.

As much as U.S. $2.1 billion worth of M&A (merger and acquisition) transactions were inked in 2017 in the. The Japanese conglomerate has already written off its investment in Snapdeal.

Walmart is trying to shed its image as an offline giant, formally dropping the word "stores" from its name a year ago, and later said it would close about 10 per cent of its Sam's Club discount stores.

The Confederation of All India Traders (CAIT) has strongly objected to the Walmart-Flipkart deal proposal and demanded that the government set up an agency to regulate the e-commerce sector and pending that, no acquisition deal should get government approval. If sources are to be believed, he has the move well thought-out, as he plans to sell his 5.5% stake in the company for almost USD1 billion. As part of its quest, it is working out a deal with Flipkart. Overall, this is expected to be a $3 billion dollar expense between the two.

Previous Reuters report indicated the United States grocery store chain was in advanced talks to acquire 51% or more of the e-commerce player for $10 billion to $12 billion (estimated Rs 67,200 crores to Rs 80,700 crores), valuing Flipkart at some $18 billion to $20 billion (estimated Rs 1.21 lakh crores to Rs 1.34 lakh crores).

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