Amazon Makes Formal Offer for 60% of Flipkart

Alicia Cross
May 3, 2018

U.S. online retail major Amazon.com Inc is reported to have made a formal offer to buy a 60 per cent stake in Indian online retailer Flipkart. The likelihood of a $12 billion deal with Walmart has increased after a recent approach towards Walmart's global CEO by Softbank, amajor investor in Flipkart.

Additionally, an acquisition by Walmart could include Google parent Alphabet taking a minority stake in Flipkart valued at $1 billion to $2 billion.

Most Flipkart shareholders also preferred a cashout deal as against a shareswap with Amazon. Amazon said it does not offer comments on rumors and speculation, and Flipkart did not immediately respond to a request for comment. Walmart expects the Flipkart stake purchase - its biggest e-commerce bet anywhere globally - to trigger a re-rating of its stock market valuation, which has trailed Amazon.

According to the same source, Amazon's bid is a counter to Walmart, which is in advanced talks to become the largest shareholder of Flipkart.

Talks of Amazon making a counterbid to pick up stake in Flipkart have been doing the rounds for a while now. Sources indicated that Amazon, which aggressively competes with Flipkart in the India market, has put in a matching bid along with a $2-billion breakaway fee.

Amazon's offer could kickstart a new battle between it and Walmart, already fierce retail rivals in the United States.

North Korea will SHUT nuke test site next month
The South Korean Government is trying to keep up the momentum in diplomatic efforts to resolve the North Korean nuclear question. Pompeo said that the United States also will have to match North Korea's actions, although he provided no details.

The crippling injury crisis that may have cost Bayern Champions League glory
Real hold a 2-1 lead after the first leg in Germany last week, however the Frenchman insists the job is nowhere near complete. Bayern paid attention to Madrid's recent struggles. "They are not invincible despite what many people may think".

Amazon Is Turning Vancouver's Old Canada Post Building Into Their New HQ
The new operation will be in addition to Amazon's 156,000-square-foot building opened in Vancouver in 2015. However, the new office is expected to bring another 1,000 workers to the city by 2020.

A spokesman for Walmart declined to comment.

The e-commerce major's investors and founders are in favour of the deal with Walmart, according to the sources.

While Walmart was earlier believed to be the front-runner to buy a controlling stake and take over Indian e-commerce player Flipkart, the latest reports might change that idea. Softbank, Flipkart's main stakeholder, however, had some apprehensions over a deal with Amazon. The bid also emphasizes the importance of gaining a greater foothold in online sales in India, a market expected to be worth $200 billion a year within a decade. At that time, Flipkart had also raised funds from eBay, Tencent Holdings and Microsoft Corp.

Flipkart and Amazon India did not reply to email queries.

Flipkart's board had appeared to be leaning toward Walmart over Amazon because it thinks the deal will have fewer hurdles.

Other reports by Free-Prsite

Discuss This Article

FOLLOW OUR NEWSPAPER