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Flipkart board clears 75% stake sale deal with Walmart for $15 billion

04 May, 2018, 14:19 | Author: Shawna Walton
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These investors, are reportedly expected to fully or partially sell their shares in Flipkart as Walmart makes its acquisition bid for the company. The American company will buy 73% of Flipkart for around $14.6 billion in a cash-and-stock buyout, reported Factor Daily.

Earlier this week, Inc42 reported that Flipkart has set aside $400 Mn to buyback shares of minority investors.

As per both reports, Google's parent Alphabet too will be participating in the deal and will pump in around $3 billion.

Amazon's offer is likely to be on par with Walmart's bid for the Indian company.

Kalyan Krishnamurthy is expected to stay on as CEO of Flipkart post the deal, while co-founder Sachin Bansal is expected to exit the company in all capacities including his seat on the board of directors after the takeover.

CEO Krishnamurthy is expected to continue in his role, but numerous reports have been pointing to the exit of one of the two founders, Sachin Bansal, who is now the executive chairman of the company.

People familiar with the negotiations said Walmart has been keen on retaining only one of the two founders as they fine-tune the deal. MUMBAI- Indian e-commerce firm Flipkart's board has approved a deal to sell an equity stake of about 75 percent in the company to a group led by Walmart Inc for about $15 billion, Bloomberg reported on Friday, citing unnamed sources. Walmart also plans to develop a grocery marketplace using Flipkart. The interest of Amazon and Walmart in India could also be because the retailers have struggled to find footing in China, largely because of the presence of local e-commerce players like Alibaba. Flipkart had then announced that it had cash in excess of Dollars 4 billion on its balance sheet.

India is a fast-growing e-commerce market, now worth $27 billion and forecast to grow at 29.2 percent over the next four years, reaching $73 billion by 2022.

Walmart's investment would give Flipkart not just additional funds to fight Amazon, but also arm it with a formidable ally with extensive experience in retailing, logistics and supply chain management. It is quite a smart strategy by Walmart to take on Amazon.

"The stakes are really high for Walmart", said Brian Yarbrough, senior research analyst with Edward Jones.

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