INSUBCONTINENT EXCLUSIVE:
Authors: JordanA $20 billion valuation for Flipkart would be substantially higher than the $12 billion mark hit in 2017
The board of Flipkart Online Services Pvt has approved an agreement to sell about 75 percent of the company to a Walmart Inc.-led
group for approximately $15 billion, according to people familiar with the matter, an enormous bet by the American retailer on international
expansion.Under the proposed deal, SoftBank Group Corp
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
Google-parent Alphabet Inc
is likely to participate in the investment with Walmart, said one of the people
A final close is expected within 10 days, though terms could still change and a deal isn't certain, they said.That would seal a Walmart
triumph over Amazon.com Inc., which has been trying to take control of Flipkart with a competing offer
Flipkart's board ultimately decided a deal with Walmart is more likely to win regulatory approval because Amazon is the No
2 e-commerce operator in India behind Flipkart and its primary competitor
Amazon is out of the running unless Walmart hits unforeseen trouble.If completed, the deal will give Bentonville, Arkansas-based Walmart a
leading position in the growing market of 1.3 billion people and a chance to rebuild its reputation online
The world's largest retailer has struggled against Amazon as consumers increase their spending on the internet
India is the next big potential prize after the U.S
and China, where foreign retailers have made little progress against Alibaba Group Holding Ltd.SoftBank declined to comment
Flipkart, Walmart and Google didn't immediately respond to requests for comment.Amazon has already been aggressively expanding in the
Founder Jeff Bezos has committed $5.5 billion to the country and his local chief, Amit Agarwal, has made progress by adapting the site to
local conditions.After Losing China, Jeff Bezos Really Wants to Win in IndiaAmazon has been gaining ground quickly on Flipkart and it tried
to derail the Walmart transaction at least in part because it will fortify the Indian rival
Walmart can aid Flipkart with deep pockets and decades of retailing expertise in skills from logistics to marketing
retailer has been working to win over the Indian company since at least last year.Last month, Walmart agreed to cede control of its U.K
grocery chain, Asda, as part of a global strategy to prioritize faster-growing markets over some more mature ones
Walmart is merging Asda with the British retailer J Sainsbury Plc and will retain a 42 percent stake in the combined company.As part of the
Walmart deal, Flipkart's existing shareholders Tencent Holdings Ltd., South Africa's Naspers Ltd
are expected to retain small stakes, the people said.A $20 billion valuation for Flipkart would be substantially higher than the $12 billion
It is already the most valuable startup in India.SoftBank stands to make a tidy profit on a stake it took only last year
The Japanese company, through its Vision Fund, invested $2.5 billion at the earlier valuation, people familiar said at the time
That stake could be worth more than $4 billion at the Walmart deal's valuation.(Except for the headline, this story has not been edited by
staff and is published from a syndicated feed.)
