The biggest acquisition deal between Indian e-commerce giant Flipkart and United States based- Walmart was finalised yesterday for a 77 percent stake worth $16 billion.
The report noted that as Amazon focused on fashion and grocery in 2017 and 2018, “Flipkart will find it hard to retain its edge in 2018”.
“After assessing the deal, we will either represent to government or to the Competition Commission, or we will go to court”, he added. It also expects Indian investments to shave 60 cents per share from earnings in fiscal 2020. Although Amazon opposes, Walmart has kept his decision. “From the deal, all will be benefitted including investors and all stakeholders of the company”, said Mohanty, who has worked for JPMorgan Chase and Barclays prior to kick start his own venture.
A group of Indian traders has expressed skepticism over much publicised Walmart and Flipkart business deal. The acquisition surpasses Walmart’s $10.8 billion deal to buy Britain’s Asda in 1999 and its acquisition two years ago of online retailer Jet.com for more than $3 billion.
Walmart’s shift to become a marketplace and to take on Amazon has stepped up a gear with the retailer confirming a $16 billion investment in Indian ecommerce platform Flipkart.
It is expected that the deal will transform one of the world’s fastest growing e-commerce markets.
“It’s capital intensive business that needs deep pockets which Walmart has”, she tweeted.
Jared Wiesel, partner at the tech-enabled consulting firm Revenue Analytics, said Walmart – which has traditionally operated physical stores – would also benefit from Flipkart’s technological expertise.
The firm also said it would pursue other growth opportunities when they arise. Walmart announced yesterday its intention to acquire a 77% stake in the company.
Walmart has renewed its focus on catching up with rivals in key global markets. Now, after selling his stake and exiting the Bengaluru-based company, an emotional Sachin took to Facebook to pen his thoughts on what is on his mind at this transformational moment for him personally and about his feelings on cutting his links with “Flipsters”. And why should not one large set of beneficiaries be the organised offline retailers, is a question that is seeking fresh answers from India. An official announcement is coming soon, he said. The investment will include $2 billion of new equity funding. This could lower its stake although Walmart plans to retain majority control.
The remainder of the Flipkart stake will be held by some of Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp.
In 2017, eBay sold its India business to Flipkart and purchased a minority stake in the e-commerce company. Flipkart plans to buy back almost $500 million worth shares from former and existing employees, Mint reported.