Walmart is buying India's Flipkart

Walmart has agreed to buy India's leading online retailer Flipkart, paying $16 billion for a controlling stake of 77%...

Posted: May 9, 2018 6:14 PM
Updated: May 9, 2018 6:14 PM

Walmart has agreed to buy India's leading online retailer Flipkart, paying $16 billion for a controlling stake of 77%.

Flipkart gives Walmart access to a market it has been trying to crack for years. The Arkansas-based retailer has been restricted by local regulations to operating wholesale outlets in the world's fastest growing economy.

"India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of e-commerce in the market," Walmart CEO Doug McMillon said in a statement.

Walmart will pump $2 billion in fresh investment into Flipkart as part of the deal. It could also bring in "additional potential investors" while retaining a majority stake, chief financial officer Brett Biggs said on a conference call.

Flipkart's strong presence in sectors such as fashion, electronics and digital payments were major factors behind Walmart's decision to buy the company, McMillon said.

News of the deal, which is still subject to regulatory approval, was let slip earlier Wednesday by SoftBank CEO Masayoshi Son during an earnings presentation. The Japanese technology group invested $2.5 billion in Bangalore-based Flipkart last year. Son said the sale to Walmart valued SoftBank's stake at $4 billion -- implying a bumper return of 60%.

Many of Flipkart's other investors will retain stakes in the company, including co-founder Binny Bansal, Chinese tech giant Tencent and Microsoft.

Related: Walmart tightens its opioid prescription policies

Taking the fight to Amazon

Walmart's interest in investing in Flipkart was first reported in 2016, and the deal boosts its firepower in a battle with Amazon in a country of 1.3 billion people.

Amazon CEO Jeff Bezos has committed to investing at least $5 billion in his company's India business, saying in 2016 that he saw "huge potential" in the country. Amazon has introduced its Prime video and music services in India in its effort to challenge Flipkart, as well as its annual Prime Day blockbuster sale.

Flipkart was founded in 2007 by two former Amazon employees -- Sachin Bansal and Binny Bansal. (They are not related.) In a Facebook post, Flipkart executive chairman Sachin Bansal confirmed that he's leaving the company after 10 years. Neither Walmart nor Flipkart would say how large Sachin Bansal's stake was, or to whom he sold it.

Flipkart now has an even bigger war chest to fend off Amazon in an e-commerce market that Morgan Stanley estimates will be worth $200 billion by 2026.

The Indian firm could also speed up its expansion into groceries, an area that has already pitted Amazon against Walmart in the United States.

Walmart cited estimates that online shopping in India will grow by 36% per year over the next five years. That's four times faster than the country's traditional retail market.

Walmart has been selling assets elsewhere in preparation for its big move in India. The company recently offloaded its UK supermarket business to Sainsbury's for $4.1 billion and a 42% stake in the combined company.

"This is clearly an investment for the future, and... is indicative of Walmart's long standing strategy of shifting resources into higher growth potential markets," said Charlie O'Shea, lead retail analyst at Moody's.

Amazon may have been trying to spoil Walmart's plans until the very last minute. Indian media reported in early May that it made a counteroffer to buy Flipkart.

-- Matt Egan contributed to this article.

Indiana Coronavirus Cases

(Widget updates once daily at 8 p.m. ET)

Confirmed Cases: 36578

Reported Deaths: 2258
CountyConfirmedDeaths
Marion10188604
Lake3876207
Allen181071
Cass15919
Elkhart158528
St. Joseph135838
Hendricks120478
Hamilton119194
Johnson1125113
Madison60061
Porter56233
Clark53942
Bartholomew53139
LaPorte44824
Howard44236
Tippecanoe4344
Jackson4012
Delaware39741
Shelby39722
Hancock35427
Boone32436
Floyd31941
Vanderburgh2913
Morgan28626
Noble27821
Montgomery24917
Clinton2471
White2399
Decatur23132
Grant22923
Dubois2113
Kosciusko2052
Harrison19622
Marshall1872
Henry18512
Vigo1828
Greene17226
Dearborn17122
Monroe17113
Lawrence17124
Warrick16729
Miami1461
Putnam1427
Jennings1324
Orange13122
LaGrange1282
Scott1263
Franklin1168
Ripley1086
Daviess10416
Carroll952
Wayne906
Steuben902
Wabash812
Newton8010
Fayette797
Jasper741
Jay580
Clay533
Randolph523
Rush513
Fulton511
Washington501
Pulaski500
Jefferson491
Whitley453
DeKalb451
Starke423
Perry390
Huntington382
Sullivan371
Wells350
Owen341
Brown331
Benton320
Knox310
Blackford272
Tipton261
Crawford250
Adams231
Switzerland220
Spencer221
Fountain222
Gibson202
Parke180
Posey160
Martin140
Warren131
Ohio130
Vermillion100
Union100
Pike60
Unassigned0180

Illinois Coronavirus Cases

(Widget updates once daily at 7 p.m. CT)

Confirmed Cases: 125915

Reported Deaths: 5795
CountyConfirmedDeaths
Cook813443880
Lake8647334
DuPage7997394
Kane6672205
Will5799285
Winnebago246566
McHenry167779
St. Clair126292
Kankakee98954
Kendall83919
Rock Island70325
Champaign6777
Madison62465
Boone49817
DeKalb4508
Sangamon36029
Peoria30111
Jackson30010
Randolph2734
McLean22613
Ogle2253
Stephenson2115
Macon20020
Clinton19017
Union17114
LaSalle16016
Whiteside14913
Coles13817
Iroquois1355
Warren1220
Out of IL1161
Grundy1112
Knox1020
Jefferson10116
Monroe10012
McDonough9113
Unassigned900
Lee821
Tazewell815
Cass760
Williamson753
Henry700
Pulaski580
Marion520
Jasper467
Macoupin462
Adams441
Morgan421
Perry420
Vermilion421
Montgomery411
Livingston362
Christian354
Jo Daviess321
Douglas280
Jersey241
Menard220
Bureau211
Fayette213
Ford211
Woodford212
Washington190
Mason180
Mercer180
Carroll172
Hancock171
Shelby161
Alexander140
Schuyler130
Bond121
Franklin120
Fulton120
Moultrie120
Clark110
Crawford110
Johnson110
Logan110
Piatt110
Brown100
Cumberland100
Wayne91
Effingham81
Henderson80
Massac70
Saline70
Greene60
Wabash60
Marshall50
De Witt40
Lawrence40
Richland40
Stark30
Clay20
Edwards20
Gallatin20
Hamilton20
White20
Calhoun10
Edgar10
Hardin10
Pike10
Pope10
Putnam10
Terre Haute
Clear
60° wxIcon
Hi: 88° Lo: 64°
Feels Like: 60°
Robinson
Clear
61° wxIcon
Hi: 87° Lo: 62°
Feels Like: 61°
Indianapolis
Few Clouds
61° wxIcon
Hi: 85° Lo: 62°
Feels Like: 61°
Rockville
Clear
57° wxIcon
Hi: 86° Lo: 63°
Feels Like: 57°
Casey
Clear
62° wxIcon
Hi: 87° Lo: 64°
Feels Like: 62°
Brazil
Clear
60° wxIcon
Hi: 86° Lo: 62°
Feels Like: 60°
Marshall
Clear
58° wxIcon
Hi: 87° Lo: 63°
Feels Like: 58°
Mostly sunny and hot
WTHI Planner
WTHI Temps
WTHI Radar

Latest Video

Image

Art honors Hoosier pilot

Image

Protesters gather for change

Image

Free Fishing Weekend

Image

First outdoor market of summer in Terre Haute

Image

Individual diploma presentations

Image

Protesters demand justice for George Floyd

Image

1 injured in ATV accident

Image

Saturday Morning Forecast Update

Image

Umpires

Image

The Salvation Army and the historic origins of National Donut Day

WTHI Events