You are here: Home » Companies » News
Business Standard

Walmart close to shelling out $10-12 bn for 51% stake in Flipkart: Sources

A deal is far from finalised, however, and talks between the two parties and investors in Flipkart are ongoing, said a third source

Reuters  |  NEW DELHI 

Flipkart
The logo of Flipkart is seen on the facade of the company's headquarters in Bengaluru

completed a thorough due diligence process on firm this week, two sources said, as the U.S. looks to take a controlling stake of 51 percent or more in the Indian company.

has already floated a shareholder agreement, or offer proposal, and is looking to shell out about $10 billion to $12 billion for the stake that would value at roughly $20 billion, one of the sources familiar with the matter said.

A deal is far from finalised, however, and talks between the two parties and investors in are ongoing, said a third source.

The sources asked not to be named because the talks are private.

A stake in Flipkart would pit against com in and have reported that is exploring a rival offer for India's largest home-grown player.

Walmart is now seeking a bigger stake than previously expected. reported in February that it was in talks to purchase a stake of over 40 percent in Flipkart, which is backed by the likes of SoftBank Group, Global, eBay, Accel Partners, Naspers, and Microsoft Corp.

Walmart and Flipkart declined to comment. SoftBank also declined to comment, while Tiger, its other lead investor, was not immediately reachable for comment.

Bengaluru-based Flipkart, started by two former employees, is fighting Amazon to grab a bigger piece of India's which, according to Morgan Stanley, could be worth $200 billion in a decade.

Walmart's investment would give Flipkart not just additional funds to fight Amazon, but also arm it with a formidable ally with extensive experience in retailing, logistics and

It is seen as a more likely investor than Amazon. A person familiar with the matter told that the probability of a Flipkart-Amazon deal was low, and that such a deal may spark competition fears as Flipkart and Amazon dominate India's market.

GREATER HEFT

Bentonville, Arkansas-based Walmart could also aid Flipkart in developing its private label business, one of the sources said.

For Walmart a deal would open up a vast market and another front to take on its biggest rival.

Walmart is initially not expected to rock the boat and is likely to retain top management. It may, however, look to bring in some of its own people on the legal and at Flipkart, one of the sources said.

Walmart would also likely have a say in the appointment of a at Flipkart, if the deal is concluded, said another of the three sources.

Two of the three sources said Global Management, and Naspers, would likely sell their entire stakes in Flipkart to Walmart if a deal is reached.

Accel and declined to comment.

Japan's SoftBank, which has invested in Flipkart through its Vision Fund, may also consider selling a part of its roughly 20 percent stake if Walmart offers a good price, two sources said.

SoftBank last year invested $2.5 billion in Flipkart through prime and secondary share purchases.

First Published: Fri, April 06 2018. 18:02 IST
RECOMMENDED FOR YOU