Walmart Buys Flipkart in Biggest Global Ecommerce Deal

Walmart Buys Flipkart in Biggest Global Ecommerce Deal

Sachin Bansal, left, has left the company he launched called Flipkart but why?

Recently, Flipkart co-founder Binny Bansal had announced 100 percent buyback of vested employee stock options (ESOPs) with reports suggesting that it could be around $150 (Rs 10,000) a share, according to a Times of India report.

Global retail giant Walmart bought Flipkart for $16 billion (1.12 lakh crore) in the biggest ecommerce deal in the world.

A day after announcing Dollars 16 billion investment in India's largest online retailer Flipkart, Walmart Inc today said it will continue to grow its wholesale cash-and-carry business, adding 50 new stores in the next four-five years. Nonetheless, the USA brick-and-mortar behemoth has still bagged a significant stake of around 55 per cent. Naspers sold its 11.18 per cent stake in Flipkart to Walmart for $2.2 billion. The transaction, which was officially announced on Wednesday after months of extensive media coverage, has been in the works since 2016. The reason for this potential flip-flop is being attributed to a hefty tax burden that a short-term exit from Flipkart will attract for Softbank.

SoftBank had invested $2.5 billion in Flipkart and exiting the company would fetch it up to $4.5 billion.

The CPI-M said it was common knowledge that Walmart sourced its products from worldwide markets and now these will be sold in India, further destroying the small scale and medium scale sector which is the largest provider of employment after the agricultural sector. Founder Jeff Bezos has promised to pump in more than United States dollars 5 billion to win the Indian online retail market.

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Flipkart says it has 1.6 lakh sellers on its platform.

"The situation is still very fluid".

Yet another report claimed that while SoftBank supported Walmart's acquisition, the deal had "come together quickly" and, therefore, SoftBank was still in discussions with Walmart to "determine its role in Flipkart going forward".

In this case, apart from domestic income tax laws, articles from a number of income tax treaties signed by India with the US, Singapore, Mauritius, South Africa, and a comprehensive agreement with China will also be invoked. Its Stores offers close to 5,000 items in India.

The statement also said that Walmart's collaboration with Flipkart will also support small businesses by procuring directly from them.

The mega Walmart-Flipkart deal may have created some tough competition for their bitter rivals like Amazon and Alibaba, but almost hundreds of current and former employees of Indian e-commerce giant Flipkart, it has come as a blessing! Why?

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