#DealDone : Walmart Acquires 77% Stake in Flipkart for $16B
US-based retail giant Walmart has signed definitive agreements to become the largest shareholder in Indian eCommerce major Flipkart. Walmart has acquired 77% stake in Flipkart for a whopping $16 billion. The remainder of the business 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.
“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. We are also excited to be doing this with Tencent, Tiger Global and Microsoft, which will be key strategic and technology partners. We are confident this group will provide Flipkart with enhanced strategic and competitive advantage. Our investment will benefit India providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs,” said Doug McMillon, Walmart’s president and chief executive officer.
Walmart’s investment includes $2 billion of new equity funding. Walmart and Flipkart are also in discussions with additional potential investors who may join the round, which could result in Walmart’s investment stake moving lower after the transaction is complete. Even so, the company would retain clear majority ownership.
With the investment, Flipkart will leverage Walmart’s omni-channel retail expertise, grocery and general merchandise supply-chain knowledge and financial strength, while Flipkart’s talent, technology, customer insights and agile and innovative culture will benefit Walmart in India and across the globe.
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Walmart has also said that it will take Flipkart public and make it a majority-owned subsidiary in a few years.
Tencent and Tiger Global will continue on the Flipkart board, joined by new members from Walmart. The final make-up of the board has yet to be determined, Walmart added in an official statement.
Further details on who all are leaving and selling stakes are still undisclosed. The deal closing is expected later this calendar year.
