Amazon makes bid to spoil Walmart-Flipkart deal

Amazon makes bid to spoil Walmart-Flipkart deal

As the world's largest retailer, Walmart, is inching closer to buying out India's Flipkart in a USA $12 billion deal, rival Amazon has jumped into the fray, making a formal offer to pick up a 60 percent stake in Flipkart, as per a CNBC TV18 report. The US retail giant is said to be investing around $12 billion to pick up 60-80 per cent in Flipkart at a primary valuation of $20 billion.

Most of Flipkart's large investors, including Tiger Global, Accel, Microsoft, Naspers and eBay, remain on Flipkart's capitalization table, although Tiger Global and Accel-Flipkart's two earliest investors-have sold a small portion of their holdings from their earlier funds as part of this deal. Walmart and some Flipkart investors, including Japan's SoftBank Group Corp., are yet to agree on the final details and a deal could take at least a month to be signed, the report said.

Despite a board approval, Bloomberg reports that the terms of the deal could change and a deal isn't certain yet.

Once the acquisition process is complete, Flipkart's Executive Chairman Sachin Bansal may hang up his boots after taking company to new heights in the past 10 years, reports suggest.

The partnership of Flipkart co-founders Sachin Bansal and Binny Bansal is the stuff of modern Indian business legend. TOI first reported Walmart's interest in getting a route to majority at Flipkart in its February 8 edition. Walmart and SoftBank declined to comment.

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Some of Flipkart's main investors - United States hedge fund Tiger Global Management, South African tech investor Naspers and venture capital firm Accel - are likely to retain small stakes, the report said.

A person familiar with the matter told Reuters that the probability of a Flipkart-Amazon deal was low, and that such a deal may spark competition fears as Flipkart and Amazon dominate India's e-commerce market.

Currently, SoftBank and Tiger Global own little more than 20 per cent each of Flipkart, Naspers holds almost 13 per cent stake, Accel 6.4 per cent, while the Bansals own just over 5 per cent each of the company.

If the deal with Walmart goes through, it would provide Flipkart with more arsenal to go up against Amazon in the Indian market. Some sources have said that Flipkart is valued at over $20 billion. It is expected that the offer is a ploy to block Walmart from bringing its expertise in logistics and supply chain management to Flipkart.

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