US retail giant Walmart will buy a majority stake in India's largest e-commerce company Flipkart, according to the head of SoftBank, a major stakeholder in the Indian firm.
"Last night, (they) reached a final agreement and it was decided that Flipkart will be sold to America's Walmart," said SoftBank CEO Masayoshi Son, whose firm owns a 20 per cent stake in Flipkart.
It would be the biggest deal in the e-commerce space. Softbank is Flipkart's largest investor. The Walmart-Flipkart deal has been completed, Reuters quoted Son as saying in a conference call after SoftBank reported earnings.
He also informed that SoftBank's investment in the Indian online marketplace had almost doubled.
SoftBank’s 20 per cent stake in Flipkart is worth about $4 billion in the deal, Son infomred in an earnings webcast. Son had bought this stake for $2.5 billion.
India Walmart chief executive Doug McMillon have arrived in Bengaluru on Tuesday and announced the deal officially at a town hall meeting.
The said deal with Flipkart would make Walmart directly take on Amazon in Indian e-retail space.
The details of the deal has been awaited. Meanwhile, it has been reported that US retail giant Walmart in a $12 billion acquisition of India's biggest e-commerce firm Flipkart would buy 72-73 per cent stake. Bloomberg reported that board of Flipkart Online Services has approved an agreement to sell about 75 per cent of the company to a Walmart-led group for about$ 15 billion.
Walmart is likely to buy stakes of multiple Flipkart investors, including that of Tiger Global Management and Softbank to end up with a significant majority holding, sources said. Tiger Global and Masayoshi Son-led Softbank hold about 20 per cent stake each in the Singapore holding company of Flipkart. Walmart will buy the stake in the Singapore holding company, Flipkart Pvt Ltd, that, in turn, holds majority shares in the multiple companies that run various businesses of the e-commerce company Flipkart.com in India.
Earlier, moving closer to its deal with Walmart, e-commerce major Flipkart has bought back over 1.8 million shares worth more than USD 350 million from minority investors, as per information filed by Flipkart with Singapore's Accounting and Corporate Regulatory Authority.
India is a critical market for both Walmart and Amazon, and a deal with Flipkart would help either player in consolidating their position in the booming e-commerce market here.
