New Delhi: In what could be touted as one of the largest M&A deals in India, world’s largest retailer Walmart Inc may announce its deal to buy a majority stake in Flipkart on Wednesday.
As per a report in the Times of India Walmart chief executive Doug McMillon will arrive in Bengaluru and announced the deal officially at a town hall meeting.
Here are 10 major development on the Flipkart-Walmart Deal
- Japan’s SoftBank Group Corp and Tiger Global Management are said to be selling almost all of their about 20 percent stake each in Flipkart.
- Walmart will likely end up with upto 80 percent of Flipkart, valuing the company at about USD 20 billion.
- The deal, will see some of the biggest investors in Flipkart offloading their stake in the country’s largest e-commerce company.
- Bentonville, Arkansas-based Walmart will acquire about a 60 percent stake in Flipkart, while Alphabet will get a roughly 15 percent stake in the online marketplace for about USD 3 billion, a Reuters report said.
- Walmart is expected to get three board seats at Flipkart and will also have a say in the appointments of the group`s finance, legal and compliance heads. There are also reports that Sachin Bansal, who had co-founded Flipkart with Binny Bansal 11 years ago, could be exiting the company by selling his over 5 percent stake.
- Flipkart was valued at about USD 12 billion last year, according to researcher CB Insights.
- The deal will help the US retail giant — which has seen consumers migrate to online platforms like those run by Amazon — get a foothold in the world’s fastest growing economy with a market of 1.3 billion people. The Flipkart model would help the bricks-and-mortar retail giant to take on its global rival Amazon.
- For Flipkart, the deal would give it additional capital and retail muscle to fight Amazon.
- Together, Flipkart and Amazon control majority of India’s USD 30 billion e-commerce market that is forecast to grow to USD 200 billion by 2026 (Morgan Stanley estimate).
- Amazon is believed to have offered Flipkart a higher valuation of about USD 22 billion, along with a break up fee of USD 2 billion, compared to Walmart’s USD 18-20 billion valuation of the Bengaluru-based company.