NEW DELHI: The Competition Commission of India (CCI) on Wednesday approved the multibillion-dollar acquisition of e-commerce major Flipkart by global retail giant Walmart.
“CCI approves proposed acquisition of Flipkart Private Limited by Walmart International Holdings Inc,” the regulator that checks unfair business practices said on Twitter.
Walmart on May 9 had announced acquisition of 77 per cent share in the homegrown e-commerce firm for $16 billion. The US-based firm had sought the approval for the deal on May 19.
At that time, Walmart had said its proposed buyout of Flipkart did not create any competition concerns and the pecking order of the broader retail market in India would remain unaffected by the deal.
“We welcome the CCI’s decision. Our partnership with Flipkart is testament to our continued confidence in our ability to contribute to this market. We believe that the combination of Walmart’s global expertise and Flipkart will position us for long-term success and enable us to contribute to the economic growth,” Walmart said in a statement.
The acquisition of majority stake in Flipkart makes the $500-billion Walmart the largest shareholder in the e-tailer and will help accelerate its mission to transform e-commerce through digital technology and spread its influence in the Indian market. The deal will also arm Walmart to take on its international rival Amazon in the domestic turf, where the latter is a prominent player.
The CCI approval, however, is unwelcomed by retailers who have been raising their voice that the deal will create an uneven playing field for them and promote predatory pricing.
Praveen Khandelwal, secretary-general, Confederation of All India Traders (CAIT), said that they will move higher court against the decision of CCI.
“It is most unfortunate that leaving aside the objection raised by CAIT in CCI, the commission has approved the deal. Without giving CAIT any opportunity of hearing, the CCI has flayed the principle of natural justice. We deeply condemn such an attitude and will certainly move to higher court against the decision of CCI,” Khandelwal said.