Walmart Wins Over Amazon In $15 Billion Flipkart Battle

An approval regarding an agreement to sell about company's 75 percent to Walmart for approximately $15 billion is given out by the board of Flipkart Online Services Pvt. Under the deal proposed, SoftBank Group Corporation will sell all of the 20 percent stakes it holds in Flipkart through an investment fund at roughly $20 billion, stated Bloomberg. Google-Parent Alphabet Inc. would likely be participating with Walmart in the investment. This means Walmart's win over Amazon, which has been in trails to take control of Flipkart with a competing offer. The board of Flipkart finally decided to close a deal with Walmart because the chance is Walmart has more probabilities to win regulatory approval due to the reason of Amazon being the 2nd e-commerce operator in India, also, the primary competitor of Flipkart. If the deal goes successful, it will give Walmart a leading position in the 1.3 billion people growing market. Also, a golden opportunity to rebuild its online reputation.

Arvind Singhal, Chairman of the New Delhi-based retail consultancy Technopak Advisors, stated, “Flipkart is key to a global e-commerce strategy. And, Walmart clearly doesn't want to be left behind in the race as India is a critical piece.” Amazon has been aggressively making expansions in the country. After losing China, founder Jeff Bezos really wants to win in India. Regarding Flipkart, Amazon has been trying to gain ground to derail Walmart because that would mean the fortification of the Indian rival. But Walmart has deep pockets to aid Flipkart and retailing experience since decades from marketing to logistics.

Walmart agreed to give up the control of it's U.K. grocery chain, Asda, last month, as part of a global strategy making faster-growing markets as a priority. Merging Asda with the British retailer J Sainsbury Plc will retain 42 percent stake in the combined company for Walmart. As part of Walmart's deal, the existing shareholders of Flipkart South Africa's Naspers Ltd., Microsoft Corporation, Tencent Holdings Ltd., are expected to retain small stakes.

Comparing the $12 billion mark Flipkart hit last year; a $20 billion valuation would be substantially higher. Moreover, Flipkart is already the most valuable startup in India.

Source: Bloomberg

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