In one of the largest e-commerce acquisitions, US retail giant Walmart Inc has bought 77% stake in India’s biggest online retailer Flipkart for $16 billion, concluding over 20 months of talks.
Here are 10 things to know about the Walmart-Flipkart deal:
1. Taking on its rival Amazon in the Indian market, Walmart will be putting a fresh equity investment of $2 billion (nearly Rs 13,000 crore), pegging Flipkart’s value at $22 billion.
2. Flipkart co-founder and CEO (Chief Executive Officer) Sachin Bansal exited the company after selling off his entire 5.5% stake to Walmart for about $1 billion (Rs 6,700 crore).
3. In an emotional post on Facebook, Sachin Bansal wrote: “Sadly my work here is done and after 10 years, it’s time to hand over the baton and move on from Flipkart. But I’ll be watching and cheering from the outside — Flipsters, you better continue to do a good job!”
“I’ll be taking some long time off and focus on finishing a few personal projects which I haven’t been able to find time for. Will catch up on gaming (and see what kids are playing these days) and brush up on my coding skills,” he posted.
4. However, Flipkart co-founder Binny Bansal will continue as the group CEO and will additionally handle the charge of the new executive chairman of the Bengaluru-based company.
5. In a press release, Binny Bansal said: “This investment is of immense importance for India and will help fuel our ambition to deepen our connection with buyers and sellers and to create the next wave of retail in India.”
6. Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp., will continue told the remaining 23% of the company’s stake.
7. Walmart plans to broaden its online presence and also link up with 5-6 million kirana stores, help them modernize and become part of its overall supply chain.
8. Presently, Walmart India has 21 stores under the cash-and-carry system across nine states.
9. Walmart has its global sourcing centre in Bengaluru and a technology centre with 1,200 engineers.
10. According to analysts, with Flipkart acquisition, Walmart will now be able to extend its expertise in managing physical goods in the digital space.
Sreya is based in Kolkata. She is a Senior Editor of Big Wire.