Walmart, a retail company from the United States, is making their way into the online shopping market of India after it acquired Flipkart, an e-commerce company that is based in Bengaluru, in a deal that is worth $16bn (£11.8bn).
Walmart is set to invest $16bn in Flipkart, which is the largest online shop in India, for the controlling stake of over 77 percent on the company. This includes a buy out of the stakes of SoftBank, which is one of the biggest shareholders of Flipkart, and a take over of the quarter stake that it had in the firm.
According to Reuters, Masayoshi Son, the Chief Executive Officer (CEO) of SoftBank Group, announced the buy out on a earnings conference call of SoftBank ahead of the official announcement.
The remaining shareholders of Flipkart include Tiger Global Management LLC, Microsoft Corp, and Binny Bansal, the co-founder of Flipkart.
In the official announcement, Doug McMillon, the Chief Executive Officer of Walmart, stated: “India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading the transformation of e-commerce in the market.”
Last week, Amazon had also shown interest in acquiring the Indian company as it is the main competitor of the online retail giant in India, offering Flipkart with a bid for 60 percent of its shares. The decision of Flipkart to accept the offer of Walmart will significantly weaken the presence of Amazon in India.
Flipkart was established by Sachin Bansal and Binny Bansal in 2007. Bansal is now serving as the chairman of the company. Both of them were former employees of Amazon before deciding to start their own company. They have successfully established Flipkart to have the biggest online shopping presence in India.