Days after Amazon attempted to counterbid the Bentonville, Ark.-based retailer, Walmart has received clearance from Flipkart's board to acquire roughly three-quarters of the Indian ecommerce behemoth, Bloomberg has reported, citing people familiar with the matter.
In the deal, SoftBank Group Corp. has agreed to sell all of its stake, more than 20 percent, through an investment fund at a valuation of about $20 billion, the news outlet reported. Alphabet Inc., parent of technology company Google, is likely to participate in Walmart’s investment, too. Close of the deal is expected in 10 days.
“Flipkart is key to a global e-commerce strategy,” Arvind Singhal, chairman of Technopak Advisors, an Indian retail advisory firm, told Bloomberg. “Walmart clearly doesn’t want to be left behind in the race as India is a critical piece.”
Flipkart reportedly controls 40 percent of India’s online retail and is seeking to enter the grocery market, according to CNBC. Amazon made its formal counteroffer to Walmart’s for 60 percent of the ecommerce company earlier this week.
Although it has had its choice between two giants for the acquisition deal, Flipkart has leaned toward working with Walmart for the buy, sources have reported. A month ago, the mega-retailer completed its due diligence on Flipkart and made a proposal to purchase at least 51 percent of the company for between $10 and $12 billion.
India’s young ecommerce market is expected to reach $200 billion in value over the next 10 years, Morgan Stanley estimates.