American retail mammoth Walmart, which has been focussing on expanding its presence in India, is likely to ink a deal to finally buy a stake in Softbank-backed Indian e-commerce retailer Flipkart this week.
The deal, which has been under consideration for quite some time now, would pave the way for Walmart to acquire 51 per cent stake in Flipkart, a major player in the Indian e-commerce sector.
With this deal, Walmart aims to take on its US arch-rival Amazon in the Indian market. Earlier, reports emerged that Amazon too is willing to acquire stakes in Flipkart which is its biggest competitor in India.
Notably, rumours indicated issues over the deal amount between Walmart and Flipkart over purchase. Now it seems that the issue has been sorted out. Once finalised, the deal would make Flipkart at least a US $ 18 billion company.
According to media reports, post-acquisition, Walmart will acquire shares of Tiger Global Management, South African tech investor Naspers and venture capital firm Accel, the main investors in Flipkart.
It has also been reported that Sachin and Binny Bansal, the founders of Flipkart may also sell their stake as part of the deal.
Interestingly, Amazon, which earlier jumped in to buy a stake in Flipkart, has now termed it a good move for the e-commerce sector in India, if Walmart succeeds.
In an interview to Livemint, Amazon India Country Head Amit Agarwal stated that if Walmart were to become a Flipkart investor, it will boost the e-commerce market in the country.
However, the Walmart-Flipkart deal would leave Amazon worried as it will pose a serious challenge to the latter in the Indian e-market.