India’s biggest e-commerce deal to be sealed by Walmart as early as next week

 

MUMBAI: Walmart Inc could seal a deal to buy a more than 51% stake in Indian online marketplace Flipkart as early as next week, two sources familiar with the matter said on Friday.

For months, the US retail giant has been in talks with Flipkart  to acquire controlling stake, as it looks to take on rival Amazon.com Inc head-on in India. India’s  ecommerce market is tipped to grow to $200 billion in a decade.

SoftBank Group, which owns about a fifth of Flipkart through its Vision Fund, was unwilling to sell a part of its stake as Walmart was offering to buy existing shares at a valuation of $12 billion, a price the Japanese tech investor considered low, it was reported.

One of the sources said on Friday that the stalemate between SoftBank and Walmart has ended. It was not immediately clear though, whether SoftBank had agreed to sell some shares in Flipkart.

Walmart’s purchase of new equity is likely to value Flipkart at at least $18 billion.

It was earlier reported that Walmart completed due diligence on Flipkart and had made a proposal to buy 51% or more for between $10 billion to $12billion.

A third source said a deal was close, but things could still drag into the first week of May.

Some of Flipkart’s main investors – US hedge fund Tiger Global Management, South African tech investor Naspers and venture capital firm Accel – are likely to take a full exit as Walmart purchases their shares, as per sources.

Flipkart was founded by Sachin and Binny Bansal, former Amazon employees in 2007 in India’s tech hub of Bengaluru, are also likely to part sell their stake as part of the deal, one of the sources said.

All sources declined to be named as the talks are not public. Flipkart, SoftBank did not immediately respond to requests for comment, while a representative for Walmart in India declined comment.