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Amazon makes bid to spoil Walmart-Flipkart deal

04 May, 2018, 14:19 | Author: Sara Gill
  • Walmart may end up spending anywhere between $8 billion and $12 billion to buy a majority stake in Flipkart

Sachin Bansal, co-founder and chairman of India's most valued internet company Flipkart may quit the company board as Walmart, the world's largest retail giant, nears a deal to pick up a majority stake in Flipkart, The Times of India reported citing people familiar with the development. In August, most of Flipkart's minority shareholders sold a portion of their stakes to SoftBank, which pumped in roughly $2.5 billion in Flipkart to buy primary and secondary shares in the online retailer. SoftBank invested in Flipkart previous year through its investment arm SoftBank Vision Fund and held a little over 20% stake in the ecommerce major. Tech giant Google's parent company Alphabet Inc would also tag along with Walmart for an investment in Flipkart.

If the Walmart deal goes through, however, Amazon and Flipkart would remain competitors - which would likely be the best result for consumers.

The deal will see Flipkart CEO Kalyan Krishnamurthy continue with the company, while one of the two founders, Sachin Bansal, might leave. The company did not immediately respond to AFP's request for comment. The Walmart-Flipkart drama deal is reportedly finalised. Sachin Bansal, 36 and Binny Bansal 35, who became friends as colleagues in Amazon had started Flipkart in 2007.

Flipkart's major investors - Tiger Global Management, Accel and Naspers are expected to sell all their shares to the Arkansas-based retailer.


When contacted, a Flipkart spokesperson said, "There have been speculations for the last six months of Flipkart being in and out of negotiations with several parties".

Investors, including Shekhar Kirani, Deep Nishar, and IDG Ventures, as also several pension funds are reported to have exited Flipkart through the buyback at $169.31 per share, which pegs Flipkart's valuation at around $17.7 billion.

Amazon offered to buy 60 per cent of Flipkart, which places the bid on a par with an offer from Walmart, according to the station, an affiliate of CNBC.

Currently, SoftBank and Tiger Global own little more than 20 per cent each of Flipkart, Naspers holds almost 13 per cent stake, Accel 6.4 per cent, while the Bansals own just over 5 per cent each of the company. It will also be one the biggest acquisition deals by Walmart.

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