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Exclusive: Walmart close to buying majority of Flipkart, deal likely by end-June: sources

Reuters  |  HONG KONG/MUMBAI 

By and Sankalp Phartiyal

HONG KONG/MUMBAI (Reuters) - is likely to reach a deal to buy a majority stake in Indian by the end of June in what could be the U.S. retail giant's biggest acquisition of an business, two people with direct knowledge of the matter said.

reported last week that Walmart completed its due diligence on and had made a proposal to buy 51 percent or more of the Indian company for between $10 billion to $12 billion.

A deal with would step up Walmart's battle with com for a bigger share of India's fledgling market, which Morgan Stanley estimates will be worth $200 billion in a decade. have reported that is exploring a possible counter offer for

Both sources declined to be named as the talks are private.

Walmart will buy both new and existing shares, with the new shares expected to value the Bengaluru-based firm at at least $18 billion, the sources said. The price for existing shares would value the firm at about $12 billion, one of the people said.

Japan's SoftBank Group, which owns roughly one-fifth of via its Vision Fund, is unlikely to sell any of its shares due to the low price being offered for the existing shares, this source said.

has previously reported that early investors such as Tiger Global, Accel and will likely sell their entire stakes in to Walmart if a deal is reached.

A deal is not yet finalised, and talks between Walmart, and its investors are ongoing, one of the people said.

also counts eBay, and among its investors.

did not respond to a request for comment, a for Walmart in declined comment while SoftBank said it doesn't comment on speculation.

BIG INDIAN BATTLE

For Walmart, the world's largest retailer known for its superstores, a deal with would open up the vast Indian market.

Walmart has for years tried to enter but has remained confined to a 'cash-and-carry' wholesale business amid tough restrictions on foreign investment. It currently operates 21 such stores in

By comparison, closely trails Flipkart, which along with its fashion units controls nearly 40 percent of India's retail market, according to estimates by

Flipkart's investors are concerned that any deal with would run into regulatory hurdles as a combination would have more than 70 percent of India's retail market, one of the sources said.

Walmart's push into comes as has embraced offline retail, with an affiliate of the Seattle-based company picking up a $27.6 million stake in Indian retailer Shopper's Stop Ltd.

In the United States, also bought high-end grocer for $13.7 billion last year.

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

Former employees and founded in 2007 in India's tech hub of

Like Amazon's founder Jeff Bezos, they began by selling books, but have diversified rapidly, including by selling smartphones, such as those made by China's Xiaomi, through exclusive sales, and now compete with in almost all product categories.

(Writing by Miyoung Kim; Editing by Martin Howell)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, April 12 2018. 13:26 IST
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