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Competition Comm clears USD 16 billion Walmart-Flipkart deal

Press Trust of India  |  New Delhi 

The today said it has cleared US Walmart's proposed acquisition of Flipkart, a deal estimated to be worth USD 16 billion.

The approval comes less than three months after the announcement of the mega deal, which is also being opposed by various organisations.

In May, announced acquisition of 77 per cent stake of in its biggest takeover till date.

"@CCI_India approves proposed acquisition of Private Limited by Holdings, Inc," the regulator said in a tweet.

Mergers and acquisitions beyond a certain threshold require the approval of the of (CCI).

Welcoming the regulator's decision, said it remains committed to contributing to the Indian by supporting smallholder farmers, manufacturers, and its Kirana customers.

"is a in with a strong, entrepreneurial leadership team that is a good cultural fit with

"We believe that the combination of Walmart's global expertise and Flipkart will position us for long-term success and enable us to contribute to the economic growth," it said.

In a statement, Flipkart Holding welcomed the CCI's decision. "... by combining Walmart's global expertise with our leadership position and Indian ethos, we believe we are positioned for long-term success and contribution to the Indian and society," it added.

Traders' body CAIT, which has been opposed to the deal, described the approval as "most unfortunate" and said it would approach the court against the decision.

In June, more than 100 organisations opposed the deal stating it will cause "irreversible damage" to small traders and endanger jobs for thousands.

As per the notice submitted to the CCI, the acquisition of majority stake in Flipkart will be done through Holdings.

The proposed transaction would be effected pursuant to the share purchase agreement and the share issuance and acquisition agreement entered into on May 9 by and among Walmart's subsidiary and Flipkart, the notice said.

In June, Walmart said that it expects to close the deal this year.

"In May 2018, the company announced it will pay approximately USD 16 billion in exchange for approximately 77 per cent of the outstanding shares of (Flipkart). The investment includes USD 2 billion of new equity funding.

"...closing is expected later this calendar year, and is subject to regulatory approval," the American retail had said in a filing to the (SEC).

The US Strategic Partnership Forum (USISPF) said the deal is good for India as a whole.

The deal will strengthen the agriculture supply chain and create new skilled jobs, supporting the 'Make in India' initiative, USISPF said in a statement.

Walmart is a USISPF member.

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

First Published: Wed, August 08 2018. 22:30 IST