US Retail Giant Walmart Completes Flipkart Investment Deal, Becomes Largest Shareholder
Within days of receiving the nod from the Competition Commission of India (CCI), Walmart, the world’s largest retailer, announced that it has completed its $16-billion acquisition of India’s largest e-commerce firm Flipkart.
The US retail behemoth now owns 77 per cent stake in the Indian firm. The remainder of the business will be held by other shareholders, including Flipkart co-founder Binny Bansal, Tencent, Tiger Global and Microsoft.
“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, was quoted as saying.
"Our investment will benefit India by providing quality, affordable goods for customers, while creating new jobs and opportunities for suppliers,” he added.
“We are poised and ready to deliver the full value of this partnership for India," said Binny Bansal, Flipkart’s co-founder and group chief executive officer.
"By combining Walmart’s omni-channel retail expertise, supply-chain knowledge and financial strength with Flipkart’s talent, technology and local insights, we are confident that together we can drive the next wave of retail in India,” he added.
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.
Upstaged in the US and other major markets by Amazon, Walmart has been busy strengthening its e-commerce hand through acquisitions. In 2016, Walmart and its chief executive officer Doug McMillon bought Jet.com in a $3.3 billion deal. But the Beast of Bentonville was seen to be toothless in China, where it first bought the wrong online commerce company, and then invested in JD.com, the number two e-tailer in China after Alibaba.
India offers a clear path to online leadership through Flipkart, which is why Walmart is willing to plunk $12 billion for the acquisition. Walmart is already in the Indian wholesale retail game, and Flipkart means plugging directly into retail customers to make up for what it is barred from doing offline.
The India battle is part of the larger Amazon versus Walmart rivalry, which is hotting up. Last year, Amazon chief executive officer Jeff Bezos jumped boldly into the brick-and-mortar retail space by paying $13.7 billion to buy Whole Foods Market.
Also Read:
GAFA & Walmart-Flipkart Are Today’s East India Companies And We Seem Ready To Be Colonised Again