Walmart inches closer to purchasing a major stake in Flipkart
Category: #retail  By Sunil Hebbalkar  Date: 2018-04-15
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Walmart inches closer to purchasing a major stake in Flipkart

Globally acclaimed tech giant Amazon is reportedly looking forward to winning over Walmart’s bid to take over Flipkart, the leading Indian e-commerce company, Flipkart. Sources state that Flipkart Online Services however, may be inclined toward Walmart to sell its controlling stake instead of Amazon, considering that a deal of this nature would have greater certainty.

As per reliable sources, both the U.S. behemoths are placing bids of USD 20 billion to buy controlling stakes in India’s pioneering e-commerce company. The managing board of Flipkart thinks that Walmart would be able to close this deal faster than its counterpart.

Reportedly, as of now, Walmart is facing regulatory problems owing to the non-availability of a preowned online retail store. In addition, Amazon is one of the Flipkart’s rival and second leading e-commerce giant in India, which may pose problems for Walmart. However, the founders of Flipkart seem to be in favor of Walmart.

On the flip side, the largest stakeholder of Flipkart, SoftBank Group is in favor of selling the stake to Amazon owing to its success in the e-commerce business, as reported by one of the sources. According to Reuters, Softbank is not likely to sell its stakes pertaining to a low price being offered for the existing share. The other stakeholders comprising Naspers, Accel, and Tiger Global are willing to sell their all share to Walmart provided the deal is successfully concluded.

If the deal goes in the right direction, Walmart may become a major stakeholder in India, which is increasingly emerging as a prospective e-commerce market.

Meanwhile, this deal would be much more difficult for Amazon than Walmart, cite reports. Pertaining to regulatory issues, Amazon is likely to offer concessions to the government – say, something like continuing the operations of two e-commerce portals as independent brands. In addition, Amazon would have to encourage Flipkart and its managing committee to get an approval from the government authorities, possibly by paying a large breakup amount if the deal fails, quote sources.



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Sunil Hebbalkar

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Sunil Hebbalkar

Sunil Hebbalkar develops content for Algosonline, Market Size Forecasters, and a couple of other platforms. A Post graduate mechanical design engineer by qualification, he worked as an intern at the defense lab for one year in the engine design and development departm...

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