Walmart Inc today said it is buying 77 per cent stake in Flipkart for about USD 16 billion (Rs 1.05 lakh crore), its biggest deal which will give the US retailer access to Indian e-commerce market that is estimated to grow to USD 200 billion within a decade.
They "are also in discussions with additional potential investors who may join the round, which could result in Walmart's investment stake moving lower after the transaction is complete", the statement added.
"Even so, the company would retain clear majority ownership," Walmart said.
Binny Bansal, who had co-founded Flipkart with Sachin 11 years ago, will retain his 5.5 per cent stake and will be Chairman of the company's Board.
Walmart's Krish Iyer will be the CEO of the company which will continue to be based out of Bengaluru.
Walmart and Flipkart will remain separate brands and the Indian e-commerce company will have an independent Board, which will be revamped to give representation to the US firm.
"While the immediate focus will be on serving customers and growing the business, Walmart supports Flipkart's ambition to transition into a publicly-listed, majority-owned subsidiary in the future," it said.
Pre-deal, Tiger Global Management held about 20 per cent stake in Flipkart.
The deal will help the US retail giant -- which has seen consumers migrate to online platforms like those run by Amazon -- get a vantage position in e-commerce space in the world's fastest growing economy which has a huge untapped but rapidly growing market.
Only 14 per cent of its over 400 million Internet users shop online and the number is projected to rise to over 50 per cent by 2026.
The deal would bring over 175 million users to Walmart, which has been eyeing the Indian market for a few years. So far it had been handicapped by India's retail policy that does not allow overseas companies to sell directly to consumers (except in wholesale cash-and-carry segment).
Walmart runs 21 Best Price wholesale stores in the country that sell everything from fast-moving consumer goods to furniture to other retailers and institutions. It could potentially use those Best Price stores as pickup and delivery points.
"India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading the transformation of eCommerce in the market," said Doug McMillon, Walmart's president and chief executive officer.
Walmart investment, he said, will benefit India by providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers, and women entrepreneurs.
Binny Bansal said Walmart is the ideal partner for the next phase of Flipkart journey as he saw e-commerce having great potential to grow from its current status of being a relatively small part of retail in India.
Amazon was also said to have put in an aggressive offer to buy 60 per cent of Flipkart but the board of the Indian firm is said to have favoured the Walmart offer.
Launched in 2007 and envisioned as the 'Amazon of India' before the latter came to India, Flipkart owns country's largest online fashion retailers -- Myntra and Jabong -- both of which it had acquired.
Together, Flipkart-Myntra-Jabong hold 70 per cent market share of the online fashion business in India.
It also owns eBay's India business as well as popular mobile payments app, PhonePe.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)