Amazon looking to outbid Walmart in Flipkart deal

Adjust Comment Print

Google's parent company Alphabet Inc. also participated in the deal, which valued Flipkart at between $20-22 billion.

AMAZON has made a formal offer to acquire a controlling stake in Indian e-commerce giant Flipkart, putting it in contention with Walmart, according to a report Wednesday on Indian network CNBC TV18.

While it is being speculated that Walmart may retain the top management of the company after the acquisition goes through, it is also being said that the two founders - Sachin Bansal and Binny Bansal - are looking to sell their entire stake in the company.

A FactodDaily report on Thursday stated that the deal will be a cash-and-stock buyout for around $14.6 billion.

Earlier this week, Inc42 reported that Flipkart has set aside $400 Mn to buyback shares of minority investors. Sources close to the newspaper said Walmart was supposed to sign the term sheet for the deal nearly three weeks ago, but did not because SoftBank wanted Flipkart to wait until Amazon had put in its bid.

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. The deal between the two retail giants may value Flipkart at $20 billion, which suggests Sachin Bansal would get around of $1 billion on his exit. Co-founder, Binny Bansal, will probably remain after the merger since reports have indicated that Walmart is keen on keeping one of them.

World's largest retailer Walmart has finally chose to acquire Flipkart.

Armenian Protest Leader Nominated for PM's Post at Parliamentary Session
He subsequently called on his supporters to pour out on the streets and assemble at the capital's Republic Square in protest. Armenian opposition leader Nikol Pashinyan gestures to his supporters at a rally in Yerevan , Armenia April 30, 2018.

Emails sent to Flipkart and Walmart did not elicit any response.

"There has been a shareholder realignment within Flipkart over the past few weeks, which may lead to Sachin's exit", TOI quoted a source as saying.

Walmart is now seeking a bigger stake than previously expected.

Alphabet Inc. may be contributing $3 billion to the investment.

Walmart and Amazon's interest in gaining share in India comes after both retailers have struggled to grow in China, ultimately losing ground to Chinese e-commerce firm Alibaba Group Holding Ltd. It is quite a smart strategy by Walmart to take on Amazon.

Apart from a 60 percent stake, Amazon also offered Flipkart a breakup fee of USA $2 billion, the channel further said in its report.

Comments