Flipkart sale to Walmart confirmed as SoftBank strikes deal to sell stake for $4 billion
Walmart will invest $2 billion in fresh capital into Flipkart, and buy the remaining stake from the company’s existing investors, thus valuing it around $18-$20 billionUpdated: May 09, 2018 15:18 IST
SoftBank Group Co. CEO Masayoshi Son on Wednesday said it has reached a deal to sell its 20% stake in Flipkart, confirming Walmart’s majority-stake acquisition in India’s largest e-commerce player.
The deal is the largest acquisition yet for Walmart, and also the biggest such transaction in the e-commerce market.
SoftBank, through its Vision Fund, invested $2.5 billion in Flipkart and that stake will be worth about $4 billion in the deal, Son told a briefing on Wednesday, according to Bloomberg.
Walmart, the world’s largest retailer will invest $2 billion in fresh capital into Flipkart, and buy the remaining from the company’s existing investors, thus valuing it around $18-$20 billion, according to Mint.
Google parent Alphabet Inc is also expected to pick up some stake in the e-commerce venture.
Co-founder Sachin Bansal is also likely to let go of his entire 5.5% stake in the company for $1 billion, Mint said.
However, a few investors including Tiger Global Management and Tencent Holdings, are expected to retain a small part of their stake in the company.
After Sachin Bansal’s exit, co-founder Binny Bansal is expected to take on the role of Chairman of the Flipkart group, while CEO Kalyan Krishnamurthy will remain in his role.
The deal has prompted Amazon to ramp up investments in India, with the company recently infusing Rs2600 crore in its Indian unit to strengthen its war chest against rival Flipkart.
“As India’s fastest growing e-commerce player with a long-term commitment to make e-commerce a habit for Indian customers, we continue to invest in the necessary technology and infrastructure to grow the entire ecosystem”, said an Amazon india spokesperson to PTI.