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Walmart is buying controlling stake in Flipkart, confirms Softbank CEO Son

Japanese investment giant Softbank had put $2.5 billion into Flipkart last August for around 20 per cent stake; this would now be worth around $4 billion, Son said at an earnings webcast

India  |  Softbank Group  |  Sachin Bansal

Alnoor Peermohamed  |  Bengaluru 

Walmar, Flipkart
Representative Image

US retail giant Walmart Inc has agreed to buy a controlling stake in Flipkart, according to Masayoshi Son, chief executive of Softbank, the largest investor in India’s largest e-commerce marketplace.

The Japanese investment giant had put $2.5 billion into Flipkart last August for around 20 per cent stake, which will now be worth around $4 billion, Son said at an earnings webcast on Wednesday. He did not elaborate any further on the terms of the deal.

Other people in the know have said that Walmart will acquire as much as 75 per cent in Flipkart, with an investment of $15 billion. The Indian firm will be valued at $20 billion, a significant bump in its valuation compared to $12 billion when Softbank backed it last year.

The deal, expected to be announced later this evening is pegged to be the biggest transaction in the online retail sector globally. It will allow Walmart to gain a foothold in the fast-growing online retail market in and also give it a leg up over rival Amazon, which continues to lag behind Flipkart.

is the third-largest market after the US and China in terms of retail. Walmart has struggled to match in its home market of the US and it isn’t breaking any records in China, either. is touted to be the last large open market in the world and the deal to acquire Flipkart is in line with the aim of capturing this market.

ALSO READ: Walmart has sealed deal to buy Flipkart, confirms SoftBank's Masayoshi Son

Walmart had previously dabbled with the possibility of opening stores in India, but restrictive regulations and a failed partnership with Bharti Group largely kept it out. Flipkart will give Walmart an entry into India, even if the company doesn’t push to open offline stores through the partnership, something which could be on the cards after the deal.

Apart from Softbank, another major Flipkart investor expected to exit completely after the deal is Naspers. and Accel Partners, among the earliest investors in the firm, could sell most of their stake in the Indian company but retain a small amount after the transaction.

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First Published: Wed, May 09 2018. 15:31 IST