Flipkart's co-founder Sachin Bansal might take an exit from the firm after the much-talked about Walmart's takeover. According to a report published in the Times of India, Sachin Bansal would after the world's largest retail chain Walmart would finalize the deal to pick up a majority stake in the country's most valued internet firm.
However, citing resources, the report said that Binny Bansal might stay in the firm after the Walmart takeover. The publication mentioned that Walmart has been keen on retaining only one of the two founders as they finalize the deal.
"Sachin is most likely to leave and Binny will stay. Walmart has to make sure it buys off his shares, which is what is being worked out," a source told the newspaper.
The Bansals collectively own around 10% stake in Flipkart.
"Binny and Krishnamurthy (Flipkart's web retailer's CEO) have backed the deal with Walmart and the two are seen leading the final negotiations, which will likely result in a share purchase agreement by Walmart by early next week,' another person close to the deal told TOI.
Walmart is eyeing to take a controlling stake of 51 per cent or more in Flipkart. Walmart has already floated a shareholder agreement, or offer proposal, and is looking to shell out about $10 billion to $12 billion for the stake that would value Flipkart at roughly $20 billion, one of the sources familiar with the matter told news agency Reuters.
A deal is far from finalised, however, and talks between the two parties and investors in Flipkart are ongoing, said a third source to Reuters.
A stake in Flipkart would pit Walmart against Amazon.com in India and local media have reported here that Amazon is exploring a rival offer for India's largest home-grown e-commerce player.
Walmart is now seeking a bigger stake than previously expected. Reuters reported in February here that it was in talks to purchase a stake of over 40 percent in Flipkart, which is backed by the likes of SoftBank Group, Tiger Global, eBay, Accel Partners, Naspers, Tencent Holdings and Microsoft Corp.
Bengaluru-based Flipkart, started by two former Amazon employees, is fighting Amazon to grab a bigger piece of India’s massive online retail market which, according to Morgan Stanley, could be worth $200 billion in a decade.
Walmart’s investment would give Flipkart not just additional funds to fight Amazon, but also arm it with a formidable ally with extensive experience in retailing, logistics and supply chain management.
It is seen as a more likely investor than Amazon. A person familiar with the matter told Reuters that the probability of a Flipkart-Amazon deal was low, and that such a deal may spark competition fears as Flipkart and Amazon dominate India’s e-commerce market.
