The board of Indian e-commerce giant Flipkart has approved a deal to sell a 75% stake in the company to Walmart for a reported $15B, with a $3B co-investment from Alphabet.
According to Bloomberg, Softbank will sell its entire 20+% stake in Flipkart, and Google’s parent company Alphabet will likely join in the investment with Walmart, reportedly to ensure that Amazon doesn’t pull any rabbits out of their hat last minute.
It isn’t set in stone yet
The battle for one of India’s highest valued startups ( at $20B) has been mounting since at least last year, when both Walmart and Amazon declared they were interested in a buyout.
But, so far, only Flipkart’s board has approved the offer from Walmart and the deal is expected to close in the next 10 days as they await regulatory approval (meaning the terms could potentially change).
It’s a backhanded compliment to Walmart
Amazon has invested heavily in India, recently committing $5.5B to the country, and building out a more localized version of Amazon’s site in India.
But, their current success in India may have worked against them in this case. Amazon is currently the #2 e-commerce platform in India behind Flipkart and sources told Bloomberg that Flipkart’s board anticipate regulators will be more likely to approve a deal with the lesser competitor, Walmart.
Either way, it’s a huge win for Wal
A majority stake in Flipkart would allow the world’s largest retailer to make up significant ground against Amazon in India.
It would also increase the company’s presence overseas and help it build its reputation as an online retailer in the Age of Amazon.