Walmart  logo
Walmart logo

Walmart to acquire 77% stake in Flipkart

ANI | Updated: May 09, 2018 17:40 IST

New Delhi [India], May 9 (ANI): American multinational retail corporation Walmart Inc. on Wednesday announced that it has signed definitive agreements to become the largest shareholder in the Flipkart Group.
The investment will help accelerate Flipkart's customer-focused mission to transform commerce in India through technology and underscores Walmart's commitment to sustained job creation and investment in India.
Subject to regulatory approval in India, Walmart will pay approximately USD 16 billion for an initial stake of approximately 77 percent in Flipkart, while the remainder of the business will be held by some of Flipkart's existing shareholders, including the company's co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp.
While the immediate focus will be on serving customers and growing the business, Walmart supports Flipkart's ambition to transition into a publicly-listed, majority-owned subsidiary in the future.
"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 transformation of e-commerce in the market. As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market. Our investment will benefit India providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs," said Doug McMillon, Walmart's president and chief executive officer.
"This investment is of immense importance for India and will help fuel our ambition to deepen our connection with buyers and sellers and to create the next wave of retail in India. While eCommerce is still a relatively small part of retail in India, we see great potential to grow. Walmart is the ideal partner for the next phase of our journey, and we look forward to working together in the years ahead to bring our strengths and learnings in retail and eCommerce to the fore," added Binny Bansal.
Founded in 2007, Flipkart recorded GMV of USD 7.5 billion and net sales of USD 4.6 billion in the previous fiscal, representing more than 50 percent year-over-year growth in both cases. With the investment, Flipkart will leverage Walmart's omni-channel retail expertise, grocery and general merchandise supply-chain knowledge and financial strength, while Flipkart's talent, technology, customer insights and agile and innovative culture will benefit Walmart in India and across the globe.
While Walmart and Flipkart will leverage the combined strengths of both companies, they will maintain distinct brands and operating structures. Currently, Walmart India operates 21 Best Price cash-and-carry stores and one fulfillment center in 19 cities across nine states in India, with more than 95 percent of sourcing coming from India, aiding suppliers, creating skilled jobs and contributing to local economies across the country.
Walmart's investment includes USD 2 billion of new equity funding, which will help Flipkart accelerate growth in the future. Walmart and Flipkart are also in discussions with additional potential investors who may join the round, which could result in Walmart's investment stake moving lower after the transaction is complete. Even so, the company would retain clear majority ownership.
While Tencent and Tiger Global will continue on the Flipkart board, they will be joined by new members from Walmart. The final make-up of the board has yet to be determined, but it will also include independent members, the American retail major said.
Walmart also confirmed that Krish Iyer, the president and chief executive officer of its India business, will continue to lead that part of operations. (ANI)

iocl