Walmart’s (WMT) global expansion plans just received a major boost with the board of India-based e-commerce major Flipkart agreeing to sell 75% of its controlling stakes to the US-based retailer for $15 billion.
According to Bloomberg, Flipkart’s key shareholder, SoftBank, has agreed to sell nearly 20% of its stake in the e-commerce firm. Rumors are making rounds that Alphabet (GOOGL) also want a slice of Flipkart and is willing to invest $2 billion for the same, once the deal with Walmart is closed. The mega deal is expected to be completed in the next couple of weeks.
When Amazon (AMZN) barged into the deal with a formal bid to buy 60% stake in Flipkart, it was expected to derail Walmart’s attempt to buy the Indian start-up. However, the attempt failed to take off. Meanwhile, through this deal, Flipkart aims to boost its offline retail business.
The deal is seen as a game-changer for Walmart as it gives the retailer a significant ground against its US rival in India, besides expanding its global footprint. According to Morgan Stanley, the e-commerce industry in India is expected to reach $200 billion by 2026. Once the acquisition completes, Flipkart co-founder Sachin Bansal is expected to quit from the company board.
Ever since Walmart took Jet.com under its wings in 2016, it has been on an acquisition spree to boost its online growth. In 2017, the retailer generated nearly $11.5 billion from online sales in the US.
Earlier this week, Walmart sold its British unit Asda to competitor Sainsbury’s in a deal worth $10 billion but would hold 42% stake in the merged company.