The Flipkart-Walmart deal might take some time to close. This is because, according to sources close to CNBC TV18, its rival company Amazon has made a formal offer to buy 60 percent stake in the company. The offer has reportedly been made when Walmart is close to buying the home-grown company Flipkart. According to the news channel, Amazon is also looking for a non-compete agreement with the founders of Flipkart.
It was earlier reported that Flipkart has been close to selecting Walmart in order to avoid any regulatory hurdles. Considering Amazon is the second biggest player in the market, the deal could attract close scrutiny on competition issues as the combined entity will have the major share of growing e-commerce market.
It was earlier reported that Amazon might make an offer to Flipkart 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.
Not-for-profit group CUTS (Consumer Unity and Trust Society) International earlier said the merger of Flipkart and Amazon might impact the merchants negatively though, as they would have limited bargaining power due to the absence of competition among online market platforms.
“Any abuse of dominance, in the form of the merged entity dictating its terms and condition on merchants, is also a perceived threat. The merger may also impact offline retailers, if lower cost products are available on online platform, owing to lower costs associated with using information and communication technology,” it said in a statement.
Last year, SoftBank Vision Fund invested around $2.5 billion in Flipkart. The company also got funding from Tencent Holdings, eBay, and Microsoft Corp last year. Amazon also announced to invest $5 billion in India with an aim to grow its presence in the market.
With Inputs From PTI