Exclusive: Walmart in talks to buy more than 40 percent
of India's Flipkart - sources
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[February 16, 2018]
By Sankalp Phartiyal
MUMBAI (Reuters) - Walmart Inc <WMT.N> is
in talks to purchase a stake of more than 40 percent in Indian
e-commerce firm Flipkart, a direct challenge to Amazon.com Inc <AMZN.O>
in Asia's third-largest economy, two sources familiar with the matter
said on Friday.
In what would be one of its biggest overseas deals, the U.S. retailer is
looking at buying new and existing shares in Flipkart and due diligence
is likely to begin as early as next week, the sources said. They
declined to be named as the talks were private.
Terms under discussion were not immediately available, but Flipkart
would be valued at more than the $12 billion figure given when Japan's
SoftBank Group Corp's <9984.T> Vision Fund took roughly a fifth of the
firm last year for $2.5 billion, they added.
A spokesman for Flipkart said the company does not comment on rumors or
speculation. An India-based representative for Walmart declined to
comment.
A deal with Walmart would give Flipkart much needed muscle in its fight
against Amazon, which has committed to investing $5 billion in India as
it expands aggressively, including into online grocery deliveries.
For Bentonville, Arkansas-based Walmart, a deal would open a new front
in its efforts to take on Amazon, giving the world's largest
brick-and-mortar retailer access to an e-commerce market that Morgan
Stanley has estimated will rapidly grow to be worth $200 billion in a
decade.
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Men walk past the logo of Walmart outside a store in Monterrey,
Mexico February 12, 2018. REUTERS/Daniel Becerril/File Photo
It would be part of a huge e-commerce push that has seen Walmart acquire a slew
of start-ups including paying roughly $3 billion for online retailer Jet.com.
Last month it also said it was partnering with Japan's Rakuten Inc <4755.T> in
online grocery deliveries.
"As large as they are, Amazon has eaten away a significant chunk of their
revenues and I think... they view India as the largest market possibly for this
(taking on Amazon)," one of the sources said.
Walmart has for years tried to enter India but has remained confined to a
'cash-and-carry' wholesale business amid tough restrictions on foreign
investment. It currently operates 21 such stores in India.
Existing investors in the Bengaluru-headquartered Flipkart also include U.S.
hedge fund Tiger Global Management, China's Tencent Holdings Ltd <0700.HK>,
online marketplace eBay Inc <EBAY.O> and software giant Microsoft Corp <MSFT.O>.
(Reporting by Sankalp Phartiyal; Editing by Edwina Gibbs)
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