Amazon offers to buy 60% of Flipkart for $2 billion
- Author: Fernando Stephens May 05, 2018,
May 05, 2018, 1:26
It marks a shift in Walmart's traditional approach of building a business on its own. The Japanese company invested $2.5 billion at the earlier valuation, people familiar said at the time.
Adeal with Flipkart would step up the Walmart-Amazon battle for a bigger share of India's fledgling e-commerce market, which Morgan Stanley estimates will be worth $200 billion in a decade. "Walmart and Flipkart are agreeing on the deal terms, for now".
- Amazon told Reuters it does not comment on rumours and speculation. As per experts, Softbank was the only investor in Flipkart that had depicted an interest in Amazon's major stake acquisition in the firm. What the shareholding pattern is or what the structure of the deal is not known as yet.
It has been reported that the key officials of Flipkart had raised their eyebrows over the sale of almost 80% of the firm's stake to both Walmart & Amazon combined, as the move can face resistance from anti-competition regulators in India. The US retailer has been courting the Indian company since previous year. His proposal to bring in another $3-4 billion would have been a testimony of his long-term belief in the Indian online commerce story.
The source said on condition of anonymity that a deal could take at least a month to be signed.
Flipkart didn't respond to an email seeking comment.
Last month Bloomberg reported the Bentonville, Arkansas-based retailer was likely to emerge as the victor of the bidding war with it offering around $20 billion. Flipkart and Amazon dominate the online shopping space in Asia's third-largest economy. The US retailer is pushing to expand its presence in India. Flipkart, which launched in 2007, won backing from big names previous year, in technology, including Tencent and Microsoft. And with that news, a number of companies, including Google and Amazon, seem to want a piece of the Flipkart's pie. Depending on how much Flipkart investors decide to sell, Walmart's initial stake could be higher than 55%.