Walmart to buy controlling stake in India's Flipkart for
$16 billion
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[May 09, 2018]
By Sankalp Phartiyal and Nandita Bose
MUMBAI/NEW YORK (Reuters) - Walmart Inc <WMT.N>
has agreed to pay $16 billion for a roughly 77 percent stake in Indian
online shopping site Flipkart, the U.S. retailer's biggest foreign
investment as it battles rival Amazon.com Inc <AMZN.O> in one of the
world's biggest emerging markets.
The deal, capping almost two years of talks, will help the Bentonville,
Arkansas-based retailer fortify and boost market share against
Amazon.com, which reportedly had tried to make a competing offer for a
stake.
"India is one of the most attractive retail markets in the world, given
its size and growth rate, and our investment is an opportunity to
partner with the company that is leading transformation of e-commerce in
the market," Doug McMillon, Walmart's Chief Executive Officer, said in a
statement on Wednesday.

Buying a stake in Flipkart, which sells everything from soaps to
smartphones and from books to clothes, gives Walmart access to the
fledgling Indian e-commerce market that could potentially be worth $200
billion in a decade, according to Morgan Stanley.
Walmart said it plans to fund the deal through a combination of
newly-issued debt and cash on hand.
Walmart warned that it expects the deal to hit its fiscal 2019 earnings
per share by 25 cents to 30 cents, if the deal closes as expected before
the end of the second quarter.
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The Walmart logo is displayed on a screen on the floor of the New
York Stock Exchange (NYSE) in New York, U.S., May 1, 2018.
REUTERS/Brendan McDermid

The remainder of the business will be held by some of Flipkart's
existing shareholders, including Flipkart co-founder Binny Bansal,
China's Tencent Holdings Ltd <0700.HK>, Tiger Global Management LLC and
Microsoft Corp <MSFT.O>, the company said.
Earlier on Wednesday, SoftBank <9984.T> Chief Executive Officer
Masayoshi Son unexpectedly spilled the beans on the deal by confirming
on a conference call that Walmart had decided to purchase Flipkart,
ahead of the highly-anticipated official announcement.
Son said his firm's investment in the Indian online retailer had grown
to $4 billion. SoftBank's Vision Fund, the world's biggest private
equity fund, had invested $2.5 billion in Flipkart last August.
Sources have previously told Reuters that SoftBank would sell all its
shares in Flipkart to Walmart.
(Additional reporting by Sam Nussey; Editing by Patrick Graham, Bernard
Orr)
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