Walmart will buy 77 percent of online retailer Flipkart for United States dollars 16 billion, sources told Moneycontrol. The board of Flipkart finally chose to close a deal with Walmart because the chance is Walmart has more probabilities to win regulatory approval due to the reason of Amazon being the 2nd e-commerce operator in India, also, the primary competitor of Flipkart.
Walmart will purchase stakes of Flipkart's investors like Tiger Global Management and Softbank.
Flipkart sells consumer goods ranging from soaps to smartphones and clothes, and gives Walmart access to an e-commerce market that could be worth $200 billion a year within a decade, according to Morgan Stanley. Flipkart's supply chain arm, eKart, is established more than 800 cities and makes 500,000 deliveries daily.
No sooner did the news of Walmart acquiring Flipkart - one of India's biggest online retailer - break out on social media, it grabbed many eyeballs. According to a report by Forrester, Amazon India was behind Flipkart by only one percent in GMV market share past year. Walmart-Flipkart combine will have to battle America's Amazon and China's Alibaba. The value of the total deal is around $18-$20 billion, as per the reports.
Online sales have exploded in India over the past couple years. Here are the top five e-commerce acquisitions in history. Currently, Walmart India operates 21 Best Price cash-and-carry stores and one fulfillment center in 19 cities across nine states in India, with more than 95 percent of sourcing coming from India, aiding suppliers, creating skilled jobs and contributing to local economies across the country. Flipkart investors U.S. hedge fund Tiger Global, Microsoft and Tencent will continue to hold part of their stake in the new entity. Son unintentionally made the mega deal news public before the formal announcement. However, SoftBank shares are down 4 percent so far this year. But it had met with little success, thanks in large part to India's reluctance to open its retail sector to foreign companies.