Amazon bids for 60% stake in India's Flipkart

Amazon bids for 60% stake in India's Flipkart

The comments are significant given that global retail giant Walmart is inching closer to sealing the deal to buy a majority stake in Flipkart for as much as $12 billion, even though rival Amazon is still jostling to turn the deal in its favour. The American company has apparently agreed to purchase a 73% stake in the Indian online shopping portal, taking Flipkart's valuation to somewhere between $20-22 billion. The deal may also see Flipkart founder and Executive Chairman Sachin Bansal exit the Bengaluru-based company, but nothing is clear on that matter as of now.

The proposed deal may take 10 days to complete and the financial details may get updated by the end, the report added.

The acquisition of Flipkart has been a long-drawn out saga that has kept the Indian e-commerce space on edge, but it seems that a deal has finally been finalized.

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The deal will see Flipkart CEO Kalyan Krishnamurthy continue with the company, while one of the two founders, Sachin Bansal, might leave.

However, citing resources, the report said that Binny Bansal might stay in the firm after the Walmart takeover. Flipkart was last valued at about Dollars 12.5 billion when it raised USD 2.5 billion from Masayoshi Son's SoftBank a year ago.

Some of Flipkart's main investors - U.S. hedge fund Tiger Global Management, South African tech investor Naspers and venture capital firm Accel - are likely to retain small stakes, the report said. While co-founders of Flipkart reportedly willing to sell their stakes and may take an exit from the company, Google's entry in the Flipkart-Walmart deal will take on Amazon's supremacy in India. Any Flipkart-Amazon deal would have come under the scanner of the competition watchdog given their dominant market share - around 70 per cent collectively - in the Indian e-commerce market.

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Walmart would maintain a focus on the grocery market, said the sources, suggesting that nearly 50% of Walmart's initial investment would be funneled into building a food and grocery supply chain. It is expected that the offer is a ploy to block Walmart from bringing its expertise in logistics and supply chain management to Flipkart.

Amidst this, according to a report by Factordaily, Walmart has made a decision to pay a whopping $14.6 billion in cash and stock to acquire 73 per cent stake in the biggest e-commerce company in India.

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