Walmart is the Favorite to Buy Top Indian e-tailer
Walmart looks likely to take the next round in the battle for India’s retail market over rival Amazon.com. Flipkart Online Services, India’s leading e-commerce company, is leaning toward selling a controlling stake to the Bentonville, Arkansas-based company, rather than Amazon, because of the greater certainty in such a deal, according to people familiar with the matter. Both US companies are bidding for a controlling stake in Flipkart at a valuation of about $20 billion, said the people, asking not to be identified because the matter is private.
Flipkart’s board recently met to discuss the competing proposals and thinks Walmart could close a deal more quickly and smoothly, the people said. Walmart faces fewer regulatory hurdles because it has no online retail presence in the country now, while Amazon is the second-largest ecommerce player and Flipkart’s primary rival. Flipkart founders Sachin and Binny Bansal also favour Walmart because they would continue to help lead the business and the US company’s executives have emphasised their commitment to the market.
A Walmart deal has been discussed since at least last year and could still change or fall apart. SoftBank Group, Flipkart’s largest shareholder, may prefer a sale to Amazon in part because of its success in cracking open the ecommerce business, one of the people said. Amazon founder Jeff Bezos has committed $5.5 billion to India and his country chief, Amit Agarwal, has made progress by adapting the site to local conditions. Walmart, Amazon and Flipkart declined to comment.
After Losing China, Jeff Bezos Really Wants to Win in India Walmart is in talks to take a minority stake in Flipkart that could go up to 50 or 60%, said the people. The amount will depend in part on which of Flipkart’s existing shareholders want to sell, including SoftBank and Tiger Global Management. Bloomberg reported last month that Walmart would likely pay about $7 billion for one-third of the company.
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