Flipkart, an online retail company, will reportedly sell its majority stake to Walmart by the end of June. The deal will give an edge to Flipkart in fighting against its rival Amazon. It was earlier reported that Amazon made a rival bid for acquiring a majority stake in the company. Reuters reported that Flipkart has got a proposal to sell 51% or more of its stake for the value of $10 billion to $12 billion.
It is expected that Flipkart will be purchased through a combination of primary and secondary share purchases. According to research firm Forrester, Flipkart, controls nearly 40 per cent of India’s online retail market, beating Amazon with a close margin. With an aim to increase its market share Amazon has announced to invest $5 billion in India. It has been reported that Amazon plans to cut prices in the coming quarters in order to increase its presence in the market. Flipkart is the number one player in the market because of its lead in selling smartphones. Flipkart was founded by former Amazon employees Sachin Bansal and Binny Bansal in 2007.
SoftBank Group, a Japanese company which holds one-fifth share in Flipkart , is not likely to sell its stake. According to Reuters, Tiger Global, Accel and Naspers might sell their entire holdings in the final deal. Flipkart raised capital from SoftBank in August 2017