Top trio at Flipkart to resign post Walmart deal?

Top trio at Flipkart to resign post Walmart deal?

In a huge merger on Thursday, reports suggest that U.S. retail giant Walmart Inc has signed a deal to acquire 73% of controlling stakes of Indian e-retail company Flipkart - a deal that will likely prompt the exit of Flipkart's co-founder Sachin Bansal. 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. Interestingly, Amazon has also been in talks to acquire a majority stake in Flipkart, suggesting the U.S. company does not want Walmart to enter the Indian market. Besides, Google parent Alphabet is also likely to participate in the deal. But this week, according to a report by CNBC affiliate CNBC-TV18, the deal appears to not be quite final; Amazon has tendered a competing offer-complete with a $2 billion "breakup fee" to cover the cost of a potentially scuttled deal. "It is important for food safety", the source said. While Kalyan Krishnamurthy will continue as Flipkart's CEO, the company's founder, Sachin Bansal will probably be stepping down.

There are various reasons Walmart decided on Flipkart instead of other players in India's sprawling e-commerce space, such as Snapdeal or ShopClues, the primary being its large logistics network and its capability to withstand an onslaught from Amazon. With Walmart buying Flipkart, Amazon will be in competition now with Walmart in India.

Amazon was on Thursday reported to have made a counter-offer for a 60% stake in Flipkart.

Finally, after a long discussion over the deal, Flipkart board has approved an agreement to sell 75 per cent equity to Walmart for $15 billion. A spokesman for Walmart declined to comment.

Amazon makes a formal offer to buy 60% of its main competitor in India
Amazon makes bid to spoil Walmart-Flipkart deal

Flipkart and Alphabet did not immediately respond to requests for comment. The U.S. retailer has been working to win over the Indian company since at least a year ago.

Next comes the Accel Partners, which has already clocked $113.5 Mn through partial exits from Flipkart. Founder Jeff Bezos has committed $5.5 billion to the country and his local chief, Amit Agarwal, has made progress by adapting the site to local conditions. According to Forrester Research, India might become a $200 billion market in a decade, making it the most sought after ground now.

Walmart is now seeking a bigger stake than previously expected.

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