Flipkart Confirmed to Sell About 75% of Equity Stake to Walmart

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Mumbai: The suspense over Walmart Inc's much awaited acquisition of Flipkart continues as the board of India's largest e-commerce firm may have entered into a preliminary agreement with the United States retail giant for a sale that could value it at around $20 billion.

"Some of the finer details of the deal are still being worked out, but it would be announced next week", the person added.

Softbank Group will sell its 20 percent stake in the e-commerce company that it owns through an investment fund. Flipkart has been valued at around Dollars 20 billion for the transaction.

The deal would help Walmart gain considerable goodwill with its shareholders and investors might push up its market cap, which stands at $253 billion. It is not clear at this stage if the Japanese conglomerate is on board with the $20-billion valuation proposed by Walmart. Incidentally, Flipkart through its regulatory filing to Corporate Affairs Ministry in India had notified that Binny Bansal has been appointed as additional director of Flipkart Internet Pvt Ltd with effect from April 27 along with Nishant Verman. It has obviously paid from the $2.5-billion funds it raised from Soft Bank Vision Fund, Microsoft, E-Bay and other investors previous year.

The spokespersons for Flipkart as well as SoftBank could not be reached for comments despite repeated attempts. It would also increase the company's presence overseas.

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The first two sources said Alphabet Inc is also likely to invest in Flipkart alongside Walmart, but terms of the deal may change. However, in China, foreign companies have been competing toughly against Alibaba.

The investment pie: Investment numbers are market estimates; stake sale is industry estimates Note: Figures based on data available before $350 million buyback in Singapore.

A majority stake in Flipkart would put Walmart in a leading position in India - a rapidly growing market which is now viewed as "the next big potential prize after the US and China, where foreign retailers have made little progress against Alibaba Group Holding Ltd", the report noted.

Of the major institutional investors and venture partners, besides Soft Bank, Tiger Global has 20.55 per cent stake, Nasper 12.83 per cent, Accel Partners 6.44 per cent and Tencent 5.69 per cent among others. It is understood that Kalyan Krishnamurthy, CEO of Flipkart, is likely to stay on after the acquisition.

Technology giant Microsoft will also retain a small portion of its holding in the company under Walmart. One of the co-founders, Sachin Bansal is expected to exit the company entirely.