Walmart, based on revenues, the world’s largest company has almost completed the deal to buy Indian e-commerce giant Flipkart. The deal can be announced at any time from the two companies. Market eye is on the deal from the past one month and sources claim that Walmart will become the largest multinational company in India after doing this deal for around $ 15 billion.
After the deal in Walmart and Flipkart, Walmart’s turnover in India will be approximately $ 10 billion. Walmart Global CEO Doug McMillion has reached India for the deal on Tuesday and it is expected that on Wednesday, the deal will be officially declared by both the companies.
Walmart’s current work data is not shared much in India. Although Walmart’s best price-cash and carry business in India is around $ 500 million. At the same time, Walmart buys about 3 billion dollars of product from Indian companies for its international stores. Apart from this, Walmart also supplies the generic medicines up to $ 3 billion worldwide, buying from Indian pharma companies
Walmart’s investment includes $2 billion of new equity funding that would help Flipkart to accelerate its growth pace amid stiff competition from Amazon, which is also pumping in huge funds into its India operations.
US-based retail giant Walmart Inc said Wednesday it will invest $16 billion to acquire a 77 per cent stake in Indian e-commerce major Flipkart, a deal that is the biggest M&A (merger and acquisition) in India so far, higher than the $12.9-billion acquisition of Essar Oil by a consortium led by Russia’s Rosneft in 2016.
Walmart said that, along with Flipkart, it is in discussions with several other investors to join the funding round, something that could see Walmart’s stake being reduced by the time the transaction closes. Even so, the company would retain clear majority ownership. Tencent and Tiger Global will continue on the Flipkart board, joined by new nominees from Walmart. The final make-up of the board has yet to be determined but it will also include independent members,Walmart said in a statement.
“We have been operating in India since 2009 and have been very impressed with the progress. One of the things we are most excited about is ecommerce in India, which we expect to grow four times that of average retail. Flipkart is already capturing a large portion of this growth and well positioned to lead the market in the future,” said McMillion in a call with analyst.