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Walmart to buy 77% stake in India's Flipkart for $16bn

RBR Staff Writer Published 10 May 2018

US retail giant Walmart has agreed to acquire 77% stake in Indian e-commerce company Flipkart for $16bn.

The deal is subject to regulatory approval in India.

The acquisition makes Walmart the largest shareholder in Flipkart group and will help accelerate the Indian firm's mission to transform e-commerce via digital technology.

The Flipkart Group includes group companies Flipkart, Myntra, Jabong, and PhonePe.

Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings, Tiger Global Management and Microsoft will hold the remainder of the business.

Walmart will support Flipkart’s ambition to transition into a publicly-listed, majority-owned subsidiary in the future.

Walmart president and CEO Doug McMillon said India is one of the most attractive retail markets in the world, due its size and growth rate.

McMillon said: “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. We are also excited to be doing this with Tencent, Tiger Global and Microsoft, which will be key strategic and technology partners.

“We are confident this group will provide Flipkart with enhanced strategic and competitive advantage. 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.”

The two companies are expected to leverage their combined strengths, they will also maintain distinct brands and operating structures. Presently, Walmart India operates 21 Best Price cash-and-carry stores and one fulfillment center in 19 cities across nine states in India.

Walmart claims that 95% of its sourcing is done in India, which aides suppliers, creating skilled jobs and contributing to local economies across the country. Walmart India president and CEO Krish Iyer will continue in his role.

Established in 2007, Flipkart has allowed several customers, sellers, merchants, and small businesses to be a part of India's e-commerce revolution, providing more than 80 million products across over 80 categories. 

In the fiscal year ended 31 March 2018, the company recorded gross merchandise volume of $7.5bn and net sales of $4.6bn, which is more than 50% year-over-year growth.

Image: Doug McMillon with Flipkart co-founder Binny Bansal. Photo: Courtesy of Walmart Inc.