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Walmart may acquire over 40% Stake in India's Flipkart for over $12Bn

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Published on : Feb 19, 2018

In recent decades, the global retail and e-commerce industry has been impacted by a slew of industry forces disrupting the strategic landscape, especially in emerging markets. The retail space is expected to witness some large-scale acquisition deals in rapidly developing nations such as India, with an aim to shake the prominence of established players there. According to wide industry speculations confirmed recently by two sources close to the matter, Walmart Inc., is intensely eyeing a share amounting to a stake of more than 40% in Flipkart, a prominent e-commerce firm based in India. The U.S.-based multinational retail corporation is mulling to buy new and existing shares in Flipkart, with an aim to shake the global monopoly of Amazon in the retail space.

Though the exact terms of the discussion aren’t publicly disclosed yet, according to the sources tracking the development the Indian e-commerce firm will attract a value of more than US$12 billion, if the deal goes through. The due diligence is likely to begin this week itself.

Walmart’s Expected Buying Stake one of Biggest Overseas Deals in E-commerce Space

The move considered as one of its largest overseas deals made by the global retail giant in India and will help Walmart acquire a substantial stake in the regional market. On the other hand, if the deal finalizes, Flipkart with a wide product portfolio, will acquire might to pose a tough competition to Amazon in India. The e-commerce company headquartered in Bengaluru is on the wave of aggressive expansion across the country and has already intended to invest US$5 billion to this end. Of note, the investment focuses on fortifying its online grocery deliveries. Gaining a stake by Walmart, Flipkart will get a much needed boost to accelerate its march across the India e-commerce sector.

Deal to help Walmart ramp up its Global Revenue Share

On the other hand, the deal will possibly give Walmart a significant competitive edge over its rival Amazon, who has been constantly vying for a sustained revenue share in the regional market. Powered by a spate of deal to acquire start-ups in recent years, the Bentonville-headquartered retailer looks to augment its revenue share in the global e-commerce market.