World's retail giant Walmart has finally sealed the deal with Indian retail firm Flipkart. It has invested a total of $16 billion in Flipkart to acquire 77% of the shares. With this, Walmart has become the biggest shareholder of Flipkart.
Walmart had announced its intention to acquire Flipkart in May this year, and within 3 months it received an approval by the Competition Commission of India (CCI). The $16 billion investment includes $2 billion of new equity funding to boost the growth of Flipkart.
Judith McKenna, President and CEO of Walmart International said, "Walmart and Flipkart will achieve more together than each of us could accomplish separately to contribute to the economic growth of India, creating a strong local business powered by Walmart. Our investment will benefit India by providing quality, affordable goods for customers, while creating new skilled jobs and opportunities for suppliers."
With this acquisition, Flipkart's financials will now be reported as Walmart's International Business Segment.
However, Flipkart's existing Management will continue to lead the business. Even after this major investment, Flipkart and Walmart will retailn their unique brand in Indian market.
However, this acquisition had led to the exit of some early investors including Sachin Bansal, the co-founder of Flipkart as Walmart required only one founder. Apart from the 77% stakes of Walmart, the reminder is shared by Binny Bansal, Tensent, Tiger Global, and Microsoft Corp.
Binny Bansal, CEO of Flipkart Group said, "By combining Walmart's omni-channel retail expertise, supply-chain knowledge and financial strength with Flipkart's talent, technology and local insights, we are confident that together we can drive the next wave of retail in India."
Flipkart is an e-commerce business bases in Bengaluru. It was founded by Binny Bansal and Sachin Bansal in 2007. It gives a neck-to-neck competition to Amazon and Snapdeal.
Sachin Bansala nd Binny Bansal used to work together in Amazon until they decided to start something on their own.