Walmart-Flipkart deal likely by end of week

Walmart-Flipkart deal likely by end of week

With Walmart entering the ecommerce sector as the new owner of Flipkart post the acquisition deal, the homegrown ecommerce giant appears to be saying several goodbyes to several of its investors. Walmart is reportedly partnering tech giant Google for the investment, pitting itself directly against rival American firm Amazon in the race to conquer the e-commerce space in the world's second-most populous country.

"This (Walmart-Flipkart) deal should not be allowed since it will encourage more loss funding and predatory pricing on e-commerce which is already gripped with malpractices", CAIT said. It has obviously paid from the U.S. $2.5-billion funds it raised from Soft Bank Vision Fund, Microsoft, E-Bay and other investors past year. Flipkart's financials will be reported as part of Walmart International once the deal closes.

The wait for Walmart - Flipkart deal is getting longer by the day. It is worth mentioning here that the American online retail behemoth has already pledged to invest about United States dollars 5.5 billion (about Rs 37,000 crore) in India. Flipkart under the new order is likely to be listed as a Walmart subsidiary in India in 2019-20, similar to its model in Mexico.

Under the proposed deal, SoftBank Group will sell all of the 20-plus percent stake it holds in Flipkart through an investment fund at a valuation of roughly $20 billion, said the people, asking not to be named because the matter is private.

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Walmart is likely to announce its much-anticipated deal to buy a controlling stake in Indian e-commerce company Flipkart before the end of this week, sources told Reuters on Tuesday, in what is likely to be the USA retail giant's biggest acquisition. The deal would value Flipkart at around $20bn.

Amazon is believed to have offered Flipkart a higher valuation of about $22 billion, along with a break up fee of $2 billion, compared to Walmart's $18-20 billion valuation of the Bengaluru-based company. Sachin Bansal remained as executive chairman. It was not immediately known how much of stake group CEO and co-founder Binny Bansal-w ill retain.

Flipkart will hold a townhall for employees on Friday, with Walmart CEO Doug McMillon likely to attend, one of the sources said. A major portion of the funds that Flipkart raises will be used to give exits to existing investors, but it is expected to raise a handsome $2-3 billion in primary capital that will help it fight Amazon. Sachin and Binny Bansal, both former Amazon.com employees, founded Flipkart in 2007, and like their U.S. rival, began by selling books.

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