Walmart agree a $16m deal to buy Indian online retailer Flipkart

Flipkart co-founder pockets an estimated $800 million from Walmart deal

The statement comes close on the heels of Walmart's announcement to buy a 77 per cent stake in online marketplace Flipkart for $16 billion, valuing India's largest e-tailer at $20 billion.

Sachin had once categorically said in an interview that he will never sell Flipkart, but after seeing ups and downs in business through 11-years, the e-commerce co-founder has finally quit.

Walmart's foray into India's online retail space sets the stage for an American business war against Amazon.com Inc in the world's fifth largest economy.

The remainder will be held by existing shareholders, including Flipkart co-founder Binny Bansal, China's Tencent Holdings, Tiger Global Management and Microsoft Corp, the company said.

During a recent investor call, Amazon CFO Brian Olsavsky had said the company would continue to invest in India as it sees?great progress? with both sellers and customers here, even though as the United States e-tailing giant had registered a loss of Dollars 622 million from global operations in the first quarter of 2018. "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".

After the United States and China, India is expected to be the next big market for online retail and is the last large, untapped market globally. Sources tell the publication that Walmart and other investors see better stability under the leadership of Binny and Kalyan. Flipkart, too, would provide local knowledge and customer insights to strengthen Walmart's play in the Indian market.

"For Walmart, this is the only way left to enter the Indian market and they are paying a premium for the access", said Satish Meena, a Forrester analyst based in New Delhi.

USA retail giant acquires stake at $21 billion valuation; Sachin Bansal exits. Flipkart is controlled by a Singapore registered entity and the acquisition of shares has happened in that company and not an Indian entity. The acquisition is the culmination of negotiations that started some 19 months ago and, according to some reports, at one point saw Amazon.com Inc. join the fray with a counter-offer.

The U.S. retail chain added that the two companies would remain separate brands and maintain their respective operating structures in India.

"I see the competition getting more aggressive as Amazon counteroffers Walmart for a stake in Flipkart". The purchase, which is also the largest acquisition in Walmart's history, is still subject to regulatory approval in India.

Such is the force & magnitude of this mega-deal worth $16 billion (Rs 1.04 lakh crore), that it changes everything for Indian e-commerce and digital sector.

Soon after signing the deal, McMillon addressed Flipkart employees in Bengaluru and would meet key policy makers here tomorrow to clear any misgiving about the deal.

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