Walmart May Soon Be Ready to Hit Amazon Hard in India
Walmart may reach a deal by the end of June to become the majority stakeholder in Flipkart, an Indian ecommerce company and serious Amazon rival in that country, Reuters has reported, citing two people with direct knowledge of the matter.
The Bentonville, Ark.-based retail giant has already completed its due diligence on Flipkart, Reuters reported last week, and has made a proposal to purchase at least 51 percent or more of the company for between $10 billion and $12 billion. Such a deal would heat up competition between Walmart and Amazon abroad as they fight over India’s still-young ecommerce market, which could be worth $200 billion in 10 years, Morgan Stanley estimates.
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.
A deal has not been finalized yet, with talks between Walmart, Flipkart and its investors ongoing. Local media have reported, however, that Amazon is exploring a possible counteroffer for Flipkart, according to Reuters. Flipkart, however, is leaning toward selling to Walmart, as a deal with the retailer has greater certainty, Bloomberg reported.
Walmart was first reported to be in talks with Flipkart in February, when Reuters reported the retailer's interest in claiming a stake of more than 40 percent in the ecommerce company. The company already controls almost 40 percent of online retail in India, ahead of Amazon, and reportedly is looking to get into groceries.