Walmart Will Acquire Flipkart’s 73% Stake For $16 Billion; Google Will Put In $3 Billion!

Unconfirmed reports have started trickling in, indicating that the mega-deal of Indian e-commerce has been finalized.

If we believe the report, then Walmart has gone all out and agreed to pay whopping $16 billion to acquire 73% stake in Flipkart, India’s largest e-commerce portal.

And there is a little surprise as well: Google’s parent company Alphabet has decided to chip in with $3 billion to acquire a minority stake in Flipkart.

An unnamed source has said,

“Everything has been finalised… The papers have been signed by both the parties,”

Walmart, Flipkart or Google has refused to acknowledge this report.

Walmart Will Finally Buy Flipkart?

FactorDaily has reported that Walmart management has agreed to pay $16 billion for 73% stake in Flipkart.

This is a big, massive jump from earlier reports, which said that Walmart is paying $10-12 billion for acquiring 51% stake in Flipkart.

If indeed, Walmart is paying $16 billion for 73% stake in Flipkart, then this will break several investment-related records in India and abroad.

Two of them are;

1. This shall be Walmart’s largest acquisition till date, anywhere in the world.
2. This will be an Indian startup ecosystem’s largest exit.

Google Is Also Chipping In?

The report indicates that Google’s parent company Alphabet will invest $3 billion to get a minority stake.

Overall, Walmart and Google and other investors will invest in Flipkart at a valuation of $20 to $22 billion.

If Google joins forces with Walmart, then it can signal trouble for Amazon.

This will mean that world’s largest retailer and world’s largest Internet company will be directly pitted against world’s largest e-commerce portal.

Forget Avengers and the Infinity War; this is the real battle for dominating Internet and eCommerce, globally.

What About SoftBank?

Softbank, the Japanese investment behemoth had invested $2.5 billion for 23% stake in Flipkart. This was done in August last year.

As per the report by FactorDaily, Softbank has decided to make a full exit from Flipkart and is ready to accept $4 billion in the deal.

If this happens, then it shall be 60% return for Softbank in little over 8 months. Not bad, considering Flipkart managed $1.4 billion against $3 billion revenues last year.

Reports say that other investors such as Tencent, Microsoft and Tiger Global will not make an exit, and will help Flipkart to march ahead.

Parties involved in this deal were: JP Morgan Chase for Walmart, Amarchand Mangaldas as legal advisors, and Bain & Co. as management consultants. Flipkart had consulted an unnamed advisor from Singapore.

While  CEO Krishnamurthy will continue at Flipkart, Sachin Bansal or Binny Bansal – either one of them will exit.

It seems that Amazon, which had even agreed to pay a break-up fee for acquiring Flipkart, has finally lost the race.

We will keep you updated, as we receive more news on this mega-deal of Indian e-commerce.