Walmart Flipkart deal brings praise, trepidation

Walmart Flipkart deal brings praise, trepidation

Amazon is presently one of the world's largest e-commerce giant and holds a very good reputation in Indian market too.

Walmart will support Flipkart's ambition to transition into a publicly-listed, majority-owned subsidiary in the future.

The US bricks and mortar retail giant bested its US counterpart Amazon after the ecommerce firm reportedly made a competing offer to acquire Flipkart that ultimately failed.

U.S. retailer Walmart's $16 billion acquisition of e-commerce firm Flipkart will vitiate the country's e-commerce space and create an uneven playing field, they said on Wednesday.

Its founders, Sachin Bansal and Binny Bansal, have been the poster boys of Indian e-commerce. Reuters has reported Google-parent Alphabet may buy a roughly 15% stake in Flipkart for $3 billion.

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But some traders in India are opposed to the deal, fearing its effect on competition. J.P. Morgan Securities LLC is acting as the lead financial advisor for Walmart, along with Barclays, with Hogan Lovells, Shardul Amarchand Mangaldas & Co. and Gibson, Dunn & Crutcher LLP as outside counsel to Walmart.

"Digitally powered e-Walmart will certainly vitiate the e-commerce and retail market".

Market experts said the deal could change the dynamics of retail business in the country, which could see huge investments, especially in logistics and supply side of the business.

Flipkart is leading in the fashion segment through the acquisition of Myntra, Jabong and eBay (Indian wing), the online fashion portals.

Control of Flipkart will provide the Bentonville, Arkansas-based Walmart access to Flipkart's network of 1 lakh sellers who retail 80 million products across 80 categories - from mobile phones to apparel and books - to 54 million active customers.

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"We are studying the deal and may resort to legal options based on the structure of the deal".

The deal has been in the works off and on for two years, with both Walmart and Amazon vying to buy Flipkart. "As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market". "But I'll be watching and cheering from the outside Flipsters, you better continue to do a good job!"

The party said proposal to allow FDI in India's multi-brand retail sector was stoutly opposed by the Left parties. As of January 31, 2018, Walmart has 11,718 stores and clubs in 28 countries, operating under 59 different names. Sachin and Binny founded Flipkart in 2007 as an online bookstore.

The factor daily report quotes that, "With the cash component to be close to 55% it will cause the exit of some of the investors in Flipkart".

In this case, apart from domestic income tax laws, articles from a number of income tax treaties signed by India with the US, Singapore, Mauritius, South Africa, and a comprehensive agreement with China will also be invoked.

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