Industry

Walmart completes Flipkart buy

Walmart CEO Doug McMillon with Flipkart Co-Founder and CEO Binny Bansal. File photo.

Walmart CEO Doug McMillon with Flipkart Co-Founder and CEO Binny Bansal. File photo.   | Photo Credit: PTI

US-based retail giant Walmart Inc. and Flipkart Group on Saturday announced the closing of the agreements for Walmart to become the largest shareholder in the Flipkart Group.

“Walmart and Flipkart will achieve more together than each of us could accomplish separately to contribute to the economic growth of India, creating a strong local business powered by Walmart,” said Judith McKenna, president and CEO of Walmart International, in a statement.

 In May this year, Walmart said it had agreed to pay $16 billion for about 77% stake in Flipkart, a transaction that valued the homegrown e-commerce company for over $20 billion. The deal would pitch Walmart, the world’s largest retailer in direct competition with its U.S. rival Amazon.com in a battle for dominance of India’s online retail market.

The announcement comes after the Competition Commission of India (CCI) recently approved Walmart’s plan to acquire the majority stake in Flipkart, despite the protests from Indian traders.

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 Ms. McKenna said Walmart’s investment will benefit India by providing quality, affordable goods for customers while creating new skilled jobs and opportunities for suppliers.

“We are delighted to learn from, contribute to and work with Flipkart to grow in India, one of the fastest-growing and most attractive retail markets in [the] world,” said Ms.McKenna.

India’s e-commerce sales are expected to grow at a 30% compounded annual growth rate through FY 2027 and touch $200 billion of gross merchandise value, according to financial services firm Morgan Stanley. “We are confident that together we can drive the next wave of retail in India,” said Binny Bansal, Flipkart’s co-founder and group chief executive officer.

He aims to achieve this by combining Walmart’s omnichannel retail expertise, supply-chain knowledge and financial strength with "Flipkart’s talent, technology and local insights."

Flipkart’s existing management team will continue to lead the business. Tencent Holdings Limited and Tiger Global Management LLC will remain represented on the Flipkart board, in addition to independent board members, and will be joined by new members from Walmart. 

With the completion of the investment, Walmart now holds approximately 77% of Flipkart. The remainder of the business is held by other shareholders, including Flipkart co-founder Binny Bansal, Tencent, Tiger Global and Microsoft Corp. Walmart’s investment includes $2 billion of new equity funding to help accelerate the growth of the Flipkart business.

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Printable version | Feb 18, 2020 10:13:49 AM | https://www.thehindu.com/business/Industry/walmart-completes-flipkart-buy/article24727222.ece

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