NEW DELHI: The race to acquire India’s largest e-commerce player Flipkart might well be over, with multiple reports stating on Friday that a deal with Walmart is just days from being finalised and that broad contours of it have already been agreed to.
According to a Bloomberg report, which quoted sources close to the negotiations, Flipkart’s board has approved an agreement to sell around 75% of the company to a Walmart-led group for approximately $15 billion. This would hike the total valuation of the company to close to $20 billion - way above last year’s $12 billion - making it the most valued Indian startup.
Separate reports by wire agencies also claim that a deal is close to being finalised, with Walmart expected to acquire nearly 72-73% stake in the company. Under the proposed deal, Softbank Group Corp - the largest shareholder in Flipkart - will sell all of its over 20% stake in Flipkart. At a valuation of $20 billion for the company, Softbank’s stake is expected to net it a cool $4 billion - a tidy profit in just a year. Softbank had invested around $2.5 billion through its Vision Fund at the earlier valuation. Flipkart has not responded to emailed queries on the deal.
It is also likely that Google-parent firm Alphabet Inc. will participate in the investment with Walmart, pumping in around $1-2 billion as the global giants seek to halt Amazon’s rampage around the world.
If the Walmart deal comes through, Flipkart will receive some much-needed fiscal muscle. Amazon has been rapidly catching up with Flipkart’s volumes, with both players neck-and-neck currently. While managing to hold its own, Flipkart has been seeking funds to compete with Amazon, whose founder Jeff Bezos has committed $5.5 billion to the country.
As for Flipkart’s founders, Sachin and Binny Bansal, it is reported that the former might exit the company if the Walmart deal goes through.