{"id":62928,"date":"2018-04-12T12:33:26","date_gmt":"2018-04-12T12:33:26","guid":{"rendered":"https:\/\/www.biphoo.com\/bipnews\/?p=62928"},"modified":"2018-04-12T12:33:26","modified_gmt":"2018-04-12T12:33:26","slug":"exclusive-walmart-close-buying-majority-indias-flipkart","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/exclusive-walmart-close-buying-majority-indias-flipkart.html","title":{"rendered":"Exclusive: Walmart close to buying majority of India’s Flipkart"},"content":{"rendered":"

Exclusive: Walmart close to buying majority of India’s Flipkart<\/span><\/strong><\/h2>\n

Walmart Inc (WMT.N) is likely to reach a deal to buy a majority stake in Indian e-commerce player Flipkart by the end of June in what could be the U.S. retail giant\u2019s biggest acquisition of an online business, two people with direct knowledge of the matter said.<\/span><\/p>\n

Reuters reported last week that Walmart completed its due diligence on Flipkart and had made a proposal to buy 51 percent or more of the Indian company for between $10 billion to $12 billion.<\/span><\/p>\n

A deal with Flipkart would step up Walmart\u2019s battle with Amazon.com (AMZN.O) for a bigger share of India\u2019s fledgling e-commerce market, which Morgan Stanley estimates will be worth $200 billion in a decade. Local media have reported that Amazon is exploring a possible counter offer for Flipkart.<\/span><\/p>\n

Both sources declined to be named as the talks are private.<\/span><\/p>\n

Walmart will buy both new and existing Flipkart shares, with the new shares expected to value the Bengaluru-based firm at at least $18 billion, the sources said. The price for existing shares would value the firm at about $12 billion, one of the people said.<\/span><\/p>\n

Japan\u2019s SoftBank Group (9984.T), which owns roughly one-fifth of Flipkart via its Vision Fund, is unlikely to sell any of its shares due to the low price being offered for the existing shares, this source said.<\/span><\/p>\n

Reuters has previously reported that early investors such as Tiger Global, Accel and Naspers will likely sell their entire stakes in Flipkart to Walmart if a deal is reached.<\/span><\/p>\n

A deal is not yet finalised, and talks between Walmart, Flipkart and its investors are ongoing, one of the people said.<\/span><\/p>\n

Flipkart also counts eBay (EBAY.O), Tencent Holdings (0700.HK) and Microsoft Corp (MSFT.O) among its investors.<\/span><\/p>\n

Flipkart did not respond to a request for comment, a representative for Walmart in India declined comment while SoftBank said it doesn\u2019t comment on speculation.<\/span><\/p>\n

For Walmart, the world\u2019s largest retailer known for its superstores, a deal with Flipkart would open up the vast Indian market.<\/span><\/p>\n

Walmart has for years tried to enter India but has remained confined to a \u2018cash-and-carry\u2019 wholesale business amid tough restrictions on foreign investment. It currently operates 21 such stores in India.<\/span><\/p>\n

By comparison, Amazon closely trails Flipkart, which along with its fashion units controls nearly 40 percent of India\u2019s online retail market, according to estimates by researcher Forrester.<\/span><\/p>\n

Flipkart\u2019s investors are concerned that any deal with Amazon would run into regulatory hurdles as a combination would have more than 70 percent of India\u2019s online retail market, one of the sources said.<\/span><\/p>\n

Walmart\u2019s push into e-commerce comes as Amazon has embraced offline retail, with an affiliate of the Seattle-based company picking up a $27.6 million stake in Indian retailer Shopper\u2019s Stop Ltd (SHOP.NS).<\/span><\/p>\n

In the United States, Amazon also bought high-end grocer Whole Foods Market Inc for $13.7 billion last year.<\/span><\/p>\n

Walmart\u2019s investment would give Flipkart not just additional funds to fight Amazon, but also arm it with a formidable ally with extensive experience in retailing, logistics and supply chain management.<\/span><\/p>\n

Former Amazon employees Sachin Bansal and Binny Bansal founded Flipkart in 2007 in India\u2019s tech hub of Bengaluru.<\/span><\/p>\n

Like Amazon\u2019s founder Jeff Bezos, they began by selling books, but have diversified rapidly, including by selling smartphones, such as those made by China\u2019s Xiaomi, through exclusive flash sales, and now compete with Amazon in almost all product categories.<\/span><\/p>\n

Source:-https:\/\/www.reuters.com\/article\/us-flipkart-online-m-a-walmart\/exclusive-walmart-close-to-buying-majority-of-indias-flipkart-idUSKBN1HJ0YJ<\/span><\/p>\n

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