Walmart, Flipkart Deal Close to Being Finalized

Walmart, Flipkart Deal Close to Being Finalized

The U.S. e-commerce giant has offered to purchase a 60% stake in Flipkart.

A recent ET report said Flipkart has set aside $400 million to buy back shares from small investors as it seeks to regain its private limited company status in Singapore.

As Walmart-Flipkart deal enters final stages, it seems like Amazon is not backing down from the deal either.

CNBC TV-18 reported that Amazon's bid is likely to be on par with Walmart's.

Amazon's offer to acquire a majority stake in Flipkart comes at a time when rival Walmart is close to completing a $12 billion deal to pick up an equivalent amount of stake in the Indian firm.

Flipkart didn't respond to an email seeking comment.

More news: Trump says he'd 'love' to testify in Russian Federation probe if treated fairly
More news: Uprooted… Macron's oak tree for Trump vanishes
More news: Marouane Fellaini hints at Manchester United stay

CNBC-TV18, the Indian affiliate of business news channel CNBC, was first to report on Amazon's offer. Moreover, a longdrawn process could also create uncertainty among employees and vendors of Flipkart, the sources said. Notably, SoftBank which holds about 21 per cent stake in the Flipkart has given a green signal to it and slated to bag $4 billion exit.

However, investors and the founders of Flipkart are reportedly more in favour of a deal with Walmart.

Joining the fray would send a signal that Amazon is less confident of closing the gap with the company founded by Sachin Bansal and Binny Bansal, the unrelated software engineers who briefly worked for the Seattle-based outfit before starting Flipkart in 2007. In contrast, a Form 1 notification, which is what competing companies file when their combined market share is below 15%, requires an approval process of three months. The Amazon bid, the person said, is pegged at $22-23 billion. The buzz is that the American company could bag four of the 10 seats on the board but the top management is not expected to change.

This news is coming when Walmart is investing a big amount in Flipkart to Buy 52% -86% share in Flipkart.

SoftBank, Flipkart's largest shareholder, was pushing other investors to wait for a rival offer for Flipkart from Amazon.

In an effort to fix its worldwide performance, Walmart in January appointed Chief Operating Officer Judith McKenna to run its global unit and has indicated it will focus on its core North American markets and growth markets like China and India.

Related Articles