Walmart Bought Flipkart : Walmart Inc has agreed to pay $16 billion for a roughly 77% stake in online shopping site Flipkart, the U.S. retailer’s biggest foreign investment ever as it battles rival Amazon in one of the world’s biggest emerging markets.
The remainder of the business will be held by some of Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, China’s Tencent Holdings Ltd, Tiger Global Management LLC and Microsoft Corp, the company said in a statement on Wednesday. Walmart Bought Flipkart
SoftBank CEO Masayoshi Son had earlier confirmed that the agreement was made on Tuesday night.
The investment was more than the $10-12 billion given by sources close to the deal in the past week.
Walmart said it expected the deal to knock about 25-30 cents off its earnings in fiscal 2019, assuming the deal closes at the end of the second quarter.
It also said that the deal included $2 billion of funding from new equity in Flipkart, which could be sold to additional investors in the future, diluting the U.S. company’s overall stake.
Walmart Bought Flipkart : To take on Amazon
The deal will help the Walmart – which has seen consumers migrating to online platforms like those run by Amazon – get a foothold in the world’s fastest growing economy with a market of 1.3 billion people. The Flipkart model would help the bricks-and-mortar retail giant to take on Amazon.
For Flipkart, the deal would give it additional capital and retail muscle to fight Amazon.
Together, Flipkart and Amazon control majority of India’s $30 billion e-commerce market that is forecast to grow to $200 billion by 2026 (Morgan Stanley estimate).