Walmart close to buying majority of India's Flipkart

World
Europe

Walmart 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 US retail giant’s biggest acquisition of an online business, reports Reuters, citing informed sources.

A deal with Flipkart would step up Walmart’s battle with Amazon.com for a bigger share of India’s fledgling e-commerce market, which Morgan Stanley estimates will be worth 200 billion US dollars in a decade.

Local media have reported that Amazon is exploring a possible counter offer for Flipkart.

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 to 12 billion US dollars, reported Reuters earlier.

Japan’s SoftBank Group, 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, a Reuters reporter said.

Flipkart also counts eBay, Tencent, and Microsoft among its investors.

Reuters Photo‍

Flipkart did not respond to a request for comment, a representative for Walmart in India declined comment while SoftBank said it doesn’t comment on speculation.

For Walmart, the world’s largest retailer known for its superstores, a deal with Flipkart would open up the vast Indian market.

Walmart has for years tried to enter India but has remained confined to a ‘cash-and-carry’ wholesale business amid tough restrictions on foreign investment. It currently operates 21 such stores in India.

By comparison, Amazon closely trails Flipkart, which along with its fashion units controls nearly 40 percent of India’s online retail market, according to estimates by researcher Forrester.

Source(s): Reuters