Flipkart approves $15 billion stake sale to Walmart-led group

Exclusive: Amazon offers to buy 60 percent in Flipkart - cnbctv18.com

Exclusive: Amazon offers to buy 60 percent in Flipkart - cnbctv18.com

SoftBank will sell its 20-plus percent stake as part of the deal, Bloomberg said, adding Google's parent Alphabet Inc was likely to participate in the investment with Walmart.

Amazon.com Inc has made a formal offer to buy 60 percent of Flipkart, CNBC-TV18 reported on Wednesday, potentially complicating Walmart Inc's bid for majority ownership of the Indian online retailer.

Sources said all major investors in Flipkart, including SoftBank of Japan, are more or less on board with Walmart's purchase and the deal could be announced in the coming days.

Walmart informed Flipkart it plans to sell shares in an initial public offer (IPO) in three years time. A Walmart-Flipkart deal could lead to more intense price competition, retail consultants said.

As the deal between Flipkart and Walmart inches closer, it has been reported that Sachin Bansal, the executive chairman, of Flipkart may leave the company who now holds 5.5 percent stake in the company. It will be $4 billion exit to Softbank in Flipkart as the company invested $2.5 billion through it's vision fund.

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Meanwhile, Flipkart has bought back $350 million worth of shares from its investors as it seeks to convert its Singapore-incorporated company to a private limited firm.

CEO Krishnamurthy is expected to continue in his role, but numerous reports have been pointing to the exit of one of the two founders, Sachin Bansal, who is now the executive chairman of the company. His co-founder, Binny Bansal (no relation) would stay on-according to this report, Walmart only wants one of the co-founders to hang around.

Amazon is reported to have offered Flipkart a higher valuation of about Dollars 22 billion, along with a break-up fee of USD 2 billion.

If the Walmart deal goes through, however, Amazon and Flipkart would remain competitors - which would likely be the best result for consumers. The interest of Amazon and Walmart in India could also be because the retailers have struggled to find footing in China, largely because of the presence of local e-commerce players like Alibaba. It is expected that the offer is a ploy to block Walmart from bringing its expertise in logistics and supply chain management to Flipkart.

Walmart shares closed 0.13 percent lower Thursday on the New York Stock Exchange, while Amazon stocks closed higher by 2.39 percent on Nasdaq.

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