CCI May Enforce ‘Structural Changes’ In Flipkart-Walmart Deal; CAIT Threatens Nationwide Agitation!
Neither Flipkart nor Walmart has approached CCI over seeking their approval for the merger, since they believe that no anti-competition rules are being violated.
As per some incoming reports, the Competition Commission of India (CCI) may intervene, and suggest some major ‘structural changes’ in the mega e-commerce merger between Walmart and Flipkart.
And the reason behind this is the continued protests by Confederation of All India Traders (CAIT) against this deal. In latest updates, CAIT has threatened a nationwide agitation against this deal.
Is there any political pressure against this merger?
CCI May Intervene In Flipkart-Walmart Deal!
Competition Commission of India (CCI) has indicated that they may suggest some major structural changes in the Walmart-Flipkart merger.
Interestingly, neither Flipkart nor Walmart has approached CCI over seeking their approval for the merger, since they believe that no anti-competition rules are being violated.
For $16 billion, Walmart has agreed to acquire 73% stake in Flipkart.
If we believe the reports, then CCI in India can follow the footsteps of Walmart-Massmart merger, which happened in 2011.
Massmart is the owner of brands like Game, Makro, Builder’s Warehouse and CBW, and is the 2nd largest distributor of consumer goods in South Africa. After they announced the merger, some organizations opposed the deal, and several terms and conditions were placed before final approval.
Some of the changes which were implemented for Walmart-Massmart merger:
- A special fund of R100 million, meant to help the suppliers and small businesses.
- No changes in the merger-related contract, for two years.
- No termination of employees for two years
- Prior labour agreements must be honoured
Now, as per some reports, Walmart-Flipkart merger too will be incorporated with these changes, and they would be enforced by CCI.
Walmart has said in their filing to the US Securities and Exchange Commission (SEC): “Closing is expected later this calendar year, and is subject to regulatory approval,”
CAIT Threatens Nationwide Agitation!
Meanwhile powerful offline retailers and traders’ body CAIT has threatened a nationwide strike and agitation against Flipkart-Walmart deal.
In a statement, CAIT said,
“Since last five years we are knocking the doors of the government for bringing reforms in e-commerce but all has gone to deaf ears which encouraged Walmart to buy Flipkart and enter into retail trade indirectly,”
CAIT has already said that they will take legal action against this deal.
CCI’s intervention in this deal coming at the same time when CAIT is threatening nationwide agitation doesn’t seem a coincidence now.
We will keep you updated, as we receive more updates.