Flipkart Acquisition

The Flipkart-Walmart deal is finally official after weeks of rumours and speculation, meaning more intense
competition for Amazon. The Flipkart acquisition was first announced by investor Softbank’s CEO and
founder Masayoshi Son in an investor call, followed by an official statement from Walmart. This is the
largest e-commerce deal in the world, and is expected to bring huge returns for the co-founders, investors
and other shareholders. The deal will bring logistics expertise to Flipkart, and will help it compete better
against Amazon, which is gaining fast in the Indian e-commerce market.

1. Walmart will acquire a 77 percent stake in Flipkart for $16 billion (roughly Rs. 1.07 lakh crores), including
$2 billion (around Rs. 13,450 crores) as cash infusion. The two companies are also in discussions with
additional potential investors who may join the round, which will mean a lower stake for Walmart once the
deal is finalised; however, it will maintain a clear majority ownership in the e-commerce brand.
2. Flipkart co-founder Binny Bansal, China's Tencent Holdings, Tiger Global Management and Microsoft will
hold the remaining shares in the company.
3. Tencent and Tiger Global will remain part of the Flipkart board, and Walmart will nominate its own
members to the board. The board will also include independent members.
4. Co-founder Sachin Bansal has announced his exit from Flipkart and is said to have sold his entire stake
in the company to Walmart. He is expected to net around $1 billion (about Rs. 6,700 crores) for his 5.5
percent stake.
5. Softbank acquired a 20 percent stake for $2.5 billion (about Rs. 16,800 crores) in Flipkart through its
Vision Fund last year, and the exit will give it $4 billion (approximately Rs. 27,000 crores). Naspers also
sold its 11.18 percent stake for $2.2 billion (about Rs. 14,800 crores).
6. The Indian startup sector has welcomed this news warmly, and tech industry body Assocham called it a
"salute" to the success of Indian startups.
7. Amazon had reportedly offered to buy a stake in Flipkart last week, but the offer was not considered. A
Flipkart-Amazon acquisition would have faced regulatory challenges.
8. The Flipkart-Walmart deal will have to gain the approval of Competition Commission of India and other
regulatory bodies. The deal gives Walmart entry into the fast-growing Indian e-commerce market, where it
will compete with rival Amazon for supremacy.
9. With the sale valuing Flipkart at roughly $20 billion (roughly Rs. 1.35 lakh crores), employees with ESOPs
about to vest will make a windfall as this is the highest valuation of the e-commerce player yet.
10. Walmart in a statement said it “supports Flipkart’s ambition to transition into a publicly-listed, majority-
owned subsidiary in the future.”