Flipkart-Walmart deal talks in final stages

Flipkart-Walmart deal talks in final stages

The Jeff Bezos-led company also offered Flipkart a breakup fee of $2 billion and is likely to be on par with Walmart Inc's bid for the e-commerce company.

(G.N.S) Dt. 02 Bengaluru Amazon.com Inc has made a formal offer to buy a 60 percent stake in Indian online retailer Flipkart, a tv channel reported on Wednesday, citing sources. Amazon wants to acquire a 60 percent stake in Flipkart.

But Flipkart presents a massive business opportunity and that seems to be driving up valuations, aided by the fact that Walmart has also been stalking the company. A non-compete agreement would prohibit Flipkart's promoters from entering into or starting a firm that directly competes with Amazon.

SoftBank, Flipkart's largest shareholder, has reportedly been pushing other investors to wait for a rival offer for Flipkart from Amazon.

With India seen as the next bastion of growth for e-commerce Amazon and Walmart have been picking up their efforts in the country. That's before Amazon made its entry into this market, Walmart's deal with Bharti was called off in 2013 when Amazon was well established in India.

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As per previous reports, Walmart was known to be in advanced talks with SoftBank to buy out a majority stake in Flipkart, totalling to about 80%, investing close to $12 billion in the company. Softbank, Flipkart's main stakeholder, however, had some apprehensions over a deal with Amazon. Depending on how much Flipkart investors decide to sell, Walmart's initial stake could be higher than 55%. Chasing a business started by two former employees suggests the $760 billion e-commerce giant is anxious by the idea of its main local rival joining forces with Walmart.

Indeed, the report added that Flipkart's co-founders as well as its investors, including Tiger Global, are in favour of the deal with Walmart.

The deal would be the USA retail giant's biggest acquisition of an online business and would kick off a battle with Amazon in an Indian e-commerce market that analysts forecast will be worth $200 billion a year within a decade. What the shareholding pattern is or what the structure of the deal is not known as yet.

Amazon has been gaining ground quickly on Flipkart and it tried to derail the Walmart transaction at least in part because it will fortify the Indian rival.

In an interview with TOI just a few days ago, Son said, "We are involved in discussions with key shareholders and the management".

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