Walmart is all set to buy 75 percent stake in Flipkart. This is because the board of Flipkart has reportedly approved an agreement to sell its majority stake to Walmart for the valuation of $15 billion. According to a report in Economic Times, as a part of the deal, SoftBank Group will sell more than 20 percent of its stake in Flipkart.
The deal could mark an end of discussions with Amazon, which made a rival bid to Flipkart for acquiring a majority stake in the company. Flipkart reportedly rejected the deal because it might lead to regulatory hurdles. The combined entity would have the majority stake in the e-commerce market of India leading to close scrutiny because of competition issues.
It has also been reported that Sachin Bansal founder of Flipkart may sell his 5.5 percent stake in the company that may value around $1 billion. Sachin and Binny Bansal found Flipkart in 2007 and started operations from an apartment in Bengaluru. Since then Flipkart has grown leaps and bound and it is currently the biggest player in the e-commerce market. Kalyan Krishnamurthy got promoted as Flipkart CEO in 2017 after Sachin Bansal served the company till 2016. Binny Bansal works as group CEO, and is responsible for investor relations and capital allocations across companies.
According to research firm Forrester, Flipkart, controls nearly 40 percent of India’s e-commerce market, beating Amazon with a close margin. Amazon, however, has recently started investing aggressively in the Indian market and has been gaining ground quickly to bridge the gap. Last year Amazon announced to invest $5 billion in India. It is expected that with Walmart on its side, Flipkart will now get the much-needed armor to fight with its closest rival helping it grow its market share.