Flipkart-Walmart deal: From price to Sachin and Binny Bansal, 10 key points to know
US retail giant Walmart is set to buy a 70% stake in Indian e-commerce company Flipkart for about $15 billion. The deal likely to be announced on Wednesday.
1. The Flipkart-Walmart deal will include a primary investment of up to $3 billion by Walmart to ramp up Flipkart’s size and scale.
2. Walmart is likely to bring along search giant Google as a strategic partner. Google’s parent Alphabet will also invest about $1.5 billion.
3. Flipkart will hold about 30% stake and will have the right to list either in India or in the US in the next three-four years.
4. The minority investors will have option to list the company on exchanges for unlocking valuation.
5. After the primary infusion, Flipkart will be valued at about $22-24 billion.
6. China’s Tencent Holdings, and US-based Tiger Global will partially exit from Flipkart and retain small stakes. However, the two companies will continue to be represented on the board. Naspers and Microsoft Corp will bring down their holdings in Flipkart to bare minimum. However, SoftBank, which owns 20.8 percent stake in Flipkart, will exit completely.
7. The Flipkart-Walmart deal is the largest inbound deal. Earlier, Bharti-Indus Towers’ $14.6 billion deal and Essar Oil's $12.9 billion deal were the two major deals in the recent past.
8. Walmart and PhonePe, a unit of Flipkart, will reportedly support 5-6 million kirana stores in modernisation of retail practices as well as digital and cashless transactions.
9. Flipkart co-founder Binny Bansal is expected to be the new chairman and group CEO of Flipkart, while Sachin Bansal will sell his 5.2% share in Flipkart after the Walmart acquisition and perhaps even exit.
10. Flipkart sold a gross merchandise value (GMV) of $7.5 billion in the fiscal year ended March 31. It recorded net sales of $4.6 billion during the year.