Tokyo: US retailer giant Walmart Inc today acquired 77% stake in Flipkart for about $16 billion in its biggest acquisition till date, Walmart said in a statement.
The deal values the 11-year old Indian e-commerce firm at $20.8 billion.
Sachin Bansal, who co-founded Flipkart with Binny Bansal in 2007, are slated to exit the company after the deal. The two, who are not related, formerly worked for Amazon.com Inc and began by selling books when they founded Flipkart.
The news was initially confirmed by the chief executive of one of Flipkart‘s biggest shareholders, SoftBank Group.
“Last night, Japan time, it (Flipkart) reached final agreement that Walmart is purchasing Flipkart,” Masayoshi Son said on a SoftBank earnings conference call, ahead of an expected announcement by Walmart–Flipkart later on Wednesday.
Buying a stake in Flipkart, which sells everything from soaps to smartphones and from books to clothes, gives Walmart access to the vast Indian e-commerce market that, according to Morgan Stanley, will potentially be worth an annual $200 billion in a decade.
Last week, Indian media reported Amazon.com Inc, Flipkart‘s biggest rival in India, had made a formal offer to buy 60% of Flipkart and that it had also proposed a $2 billion breakup fee to convince Flipkart to discuss its offer. Sources told Reuters that Amazon had shown an interest in buying Flipkart, but said a deal withWalmart was much more likely to go through.
SoftBank’s investment in the Bengaluru-based online retailer had grown to $4 billion, Son said. SoftBank’s Vision Fund, the world’s biggest private equity fund, had invested $2.5 billion in Flipkart last August.
Sources have previously told Reuters that SoftBank would sell all its shares in Flipkart to Walmart.
(With inputs from PTI)