Flipkart-Walmart Deal Almost Confirmed, But Ebay May Pose A Problem!

Galtero Lara
Abril 17, 2018

Additionally, sources also said that Amazon, for which India is a critical market, has also thrown its hat into the ring for Flipkart and is believed to be in talks with several of its shareholders, including SoftBank. Walmart has reportedly offered a $10 billion-$12 billion valuation for its shares.

Walmart has reached an agreement on buying the stakes of New York-based investment firm Tiger Global Management, South African media conglomerate Naspers, venture capital firm Accel and China's Tencent Holdings, they said. The report added that Sachin Bansal and Binny Bansal, the co-founders of the Bangalore-based company, may also sell a part of their stake. Currently, all the above shareholders together hold over 55% stake in Flipkart. So, if Walmart acquires the stakes as per the agreement it reached on, it could hold almost 50% stake in Flipkart. "In a deal like this, there are always ebbs and flows, but there is a time factor to consider as well", said the source, adding that the final contours of the transaction are still being worked on and could change on a short notice.

Flipkart reported a loss of $1.4 billion against $3 billion revenues past year, and this fact can be used by Walmart to make a better deal with eBay. SoftBank may even back out of the deal if it doesn't get the desired price and if Walmart clinches a deal with the rest of the shareholders. Both Walmart and Flipkart stand to gain much if this long-speculated deal goes through. However, regulatory hassles may play party pooper here - after all, given the dominant market share the two entities have in the ecommerce space, any Flipkart-Amazon deal is sure to face close scrutiny of the Competition Commission of India.

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Furthermore, as the daily has previously pointed out, if Walmart succeeds in its negotiations with Flipkart's existing investors, this will be one of the biggest - not to mention pretty rare - exits in the Indian startup ecosystem.

"Long-term partnerships have transformed the way India buys mobile phones". Rumours suggest that the company might launch the successor of ots a year ago launched Billion Capture Plus smartphone.

Discussions with SoftBank Going on It had invested $2.5 billion in Flipkart in August previous year through its $100 billion Vision Fund, at the time the largest private investment in India's consumer internet sector. Recode reports that even if Walmart takes a controlling stake in Flipkart, it may not be able to take over the actual merchandise deals with Flipkart.

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