US retail giant Walmart Inc is acquiring Indian e-commerce player Flipkart, SoftBank Group chief executive Masayoshi Son said on Wednesday. The Walmart-Flipkart deal was sealed on Tuesday night, Japan Time, Son said on a conference call after SoftBank reported earnings, adding that its investment in the Indian online marketplace had almost doubled.
It was previously reported that SoftBank would completely sell its shares in Flipkart to Walmart.
On Tuesday, media had reported that the deal, which will see some of the biggest investors in Flipkart offloading their stake in the country's largest e-commerce company, could soon be announced. Japan's SoftBank Group Corp and Tiger Global Management are said to be selling almost all of their about 20 per cent stake each in Flipkart.
Walmart will likely end up with 60-80 per cent of Flipkart, valuing the company at about $20 billion, they said.
Flipkart was valued at about $12 billion last year, according to researcher CB Insights.
The deal will help the US retail giant—which has seen consumers migrate to online platforms like those run by Amazon—get a foothold in the world's fastest growing economy with a market of 1.3 billion people. The Flipkart model would help the bricks-and-mortar retail giant to take on its global rival Amazon.
For Flipkart, the deal would give it additional capital and retail muscle to fight Amazon.
Together, Flipkart and Amazon control majority of India's $30 billion e-commerce market that is forecast to grow to $200 billion by 2026 (Morgan Stanley estimate).
