Walmart's whopping USA $12 bn acquisition of Flipkart to be announced soon
- Author: Zachary Reyes May 10, 2018,
May 10, 2018, 14:40
- Early investors New York-based hedge fund Tiger Global and US private-equity firm Accel Partners will sell a majority of their stakes, Reuters reported on Tuesday. Sources indicated that the deal with Walmart, which may see participation from Google's parent Alphabet, would value Flipkart at about U.S. $20 billion. Flipkart is also expected to go public with its IPO expected in the upcoming years. However, this could not be independently confirmed. Walmart can aid Flipkart with deep pockets and decades of retailing expertise in skills from logistics to marketing. There are various advantages associated with the deal between Walmart and Flipkart. Amazon is now the #2 e-commerce platform in India behind Flipkart and sources told Bloomberg that Flipkart's board anticipate regulators will be more likely to approve a deal with the lesser competitor, Walmart.
The proverbial tennis match between Walmart and Amazon for the Flipkart Group appears to have gone Walmart's way.
- Last year, Kalyan Krishnamurthy, previously an executive in Flipkart investor Tiger Global, took over as Flipkart CEO. Additionally, Walmart does business in China with JD.com, which is closely allied with Tencent, an investor in Flipkart. According to the information filed by Flipkart with Singapore's Accounting and Corporate Regulatory Authority, that was sourced by data platform Paper.vc, the move values the Bengaluru-based firm at a whopping USA $17.69 billion. The Japanese conglomerate has already written off its investment in Snapdeal.
With all these developments going on the Filpkart investors SoftBank and Naspers are expected to completely exit Flipkart.
Flipkart previous year named Kalyan Krishnamurthy, a former executive of investor US hedge fund Tiger Global Management, as the head of its core business, while Binny Bansal took the broader strategic role of group CEO.
Walmart declined to comment. But this was inevitable, and probably the only way Flipkart would have stood up to competition from Amazon. He added that Amazon Company is also carrying out its market expansion in India.
If completed, the deal will give Bentonville, Arkansas-based Walmart a leading position in the growing market of 1.3 billion people and a chance to rebuild its reputation online. Indian consumers can also look forward to personalised voice shopping of Walmart and Flipkart products by simply speaking out the orders to Google Home devices.
It looks like Flipkart have made a decision to sell to Walmart rather than Amazon with a likely reason being it will be easier to get the FLipkart deal past the regulators.
It could be a bit disconcerting for swadesi advocates to learn that India's largest e-commerce firm is changing hands to a foreign company. Now with a valuation of $20 billion looming large, current and former employees are looking forward to a windfall.