Saturday, 20 October, 2018

Flipkart's Sachin Bansal's May Quit After Closing Deal With Walmart

Click here for enlarge Click here for enlarge
Scott Davis | 04 May, 2018, 14:17

The global e-tailer has made a formal offer to buy a 60% stake in Flipkart on Monday, sources said.

Factor Daily stated some friendly investors such as Tencent, Microsoft and Tiger Global might not cash out, while Softbank, which holds 20 percent stake, will exit, making $4 billion in the process.

This could likely be the secondary valuation at which Walmart will invest in Flipkart. Sources also suggest that Google's parent company Alphabet Inc is involved in the deal, with about $3 billion in investment coming from it.

If the Walmart deal goes through, however, Amazon and Flipkart would remain competitors - which would likely be the best result for consumers.

In December a year ago, Flipkart Ltd, the Singaporebased parent entity of the Indian e-commerce giant, had bought back shares worth close to $800 million from investors including Tiger Global, Accel Partners, and DST Global.

The deal will see Flipkart CEO Kalyan Krishnamurthy continue with the company, while one of the two founders, Sachin Bansal, might leave.

People familiar with the negotiations said Walmart has been keen on retaining only one of the two founders as they fine-tune the deal.




"Walmart may look at bringing in its own private labels via Flipkart to the Indian consumers".

Walmart would maintain a focus on the grocery market, said the sources, suggesting that nearly 50% of Walmart's initial investment would be funneled into building a food and grocery supply chain.

The Chennai-based business intelligence platform Paper.vc, which sourced the filing from the Singapore's Accounting and Corporate Regulatory Authority (ACRA), said Flipkart had bought over 18 lakh preferential shares from its institutional investors like Tiger Global, Accel and Naspers.

The approval of the deal with Walmart also means that Amazon's offer to buy a majority stake in Flipkart wasn't accepted by the board.

Amazon, on its own, has committed investments to the tune of Dollars 5 billion for its operations in India.

Walmart is now seeking a bigger stake than previously expected. Any Flipkart-Amazon deal would have come under the scanner of the competition watchdog given their dominant market share - around 70 per cent collectively - in the Indian e-commerce market.

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