Walmart will likely purchase a 75 per cent stake of Indian ecommerce platform Flipkart, after the company approved an agreement of sale.
The sale sees Walmart overtake Amazon, who had put in a competing offer, which was ultimately rejected mainly due to Amazon’s position as a primary competitor.
Bloomberg reported anonymous word from involved persons that under the deal conglomerate Softbank Group will sell all of its 20-plus per cent stake, and other existing shareholders, Tencent Holdings, Naspers and Microsoft will retain their small shares.
“Flipkart is key to a global e-commerce strategy,” said Arvind Singhal, chairman of the New Delhi-based retail consultancy Technopak Advisors. “Walmart clearly doesn’t want to be left behind in the race as India is a critical piece.”
If the deal goes ahead, which is reportedly a likely bet unless Walmart runs into trouble, the Arkansas-based company will have a leading position in the Indian market.
Alongside the planned deal, Walmart has been strategizing its global position by prioritising growing markets over other more mature ones. In April, the company agreed to cede control of its UK grocery chain Asda, merging it with retailer Sainsbury while retaining a 42 per cent stake.