Walmart completes acquisition of Flipkart, pumps in $2bn
On Saturday, Walmart announced that it had completed its $16bn acquisition deal with Flipkart. Having acquired 77% stake in India's home-grown e-commerce giant, Walmart has become Flipkart's largest shareholder. In addition to completing the deal, Walmart also announced a fresh $2bn investment in Flipkart to help accelerate its growth and compete with Amazon. Here are the details.
Notably, with Walmart having completed the Flipkart deal, Flipkart's financials will now be reported as part of Walmart's international businesses. Apart from Walmart's 77% stake, the remainder of Flipkart is held by other shareholders including the likes of co-founder Binny Bansal, Tencent, Microsoft, and Tiger Global. However, as agreed earlier, Flipkart's extant management team will continue to lead the e-commerce giant's business in India.
"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," said Judith McKenna, President and CEO of Walmart International.
McKenna added that the completion of the deal and Walmart's investments in India would benefit the country in a two-pronged manner - by providing quality, affordable products for its customers, and creating new, skilled jobs and other opportunities for suppliers. It remains to be seen how Walmart-owned Flipkart now takes on Amazon in the battle to dominate the Indian e-commerce market.
Notably, according to financial services firm Morgan Stanley, the Indian e-commerce market is expected to grow at a compounded annual growth rate of 30% through FY 2027, and touch $200bn of gross merchandise value.
The Walmart Flipkart deal was announced in May, but had been pending approval from the Competition Commission of India (CCI). The announcement comes after the CCI recently approved the deal, despite protests from more than 10 lakh Indian traders over fears that Walmart-backed Flipkart would engage in unfair trade practices and impair competition in the market.