Amazon Battles Walmart for Majority Stake in Indian Ecommerce Giant Flipkart

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Amazon Battles Walmart for Majority Stake in Indian Ecommerce Giant Flipkart

05/02/2018
Amazon Battles Walmart for Majority Stake in Indian Ecommerce Giant Flipkart
Amazon has bid for a 60 percent stake in Flipkart, which controls about 40 percent of online retail in India

Amazon has made a formal counteroffer to Walmart’s for the majority stake in Flipkart, the Indian ecommerce giant that controls 40 percent of its country’s online retail and is seeking to enter the grocery market, CNBC has reported.

The Seattle-based company has bid for 60 percent of Flipkart, which also would include a non-compete agreement from the company’s founders. It also is offering a $2 billion breakup fee.

A month ago, it was reported that Bentonville, Ark.-based Walmart had completed its due diligence on Flipkart and made a proposal to buy at least 51 percent of the company for between $10 and $12 billion. Given how young India’s ecommerce market is, whichever company takes the majority stake in Flipkart stands to reap strong gains in the market, which is expected to reach $200 billion in value in 10 years, according to estimates from Morgan Stanley.

At the time of last month’s announcement, local media reported that Amazon was seeking a possible counteroffer to Walmart’s. However, it also was reported that Flipkart was leaning toward selling to Walmart, given that a deal with the mega-retailer has greater certainty.

If it wins the deal, Walmart would purchase both new and existing Flipkart shares, with the new shares expected to set Flipkart’s value at a minimum of $18 billion, Reuters noted. The price of existing shares would value the company at around $12 billion.