America’s retail giant Walmart has signed a new agreement to acquire a 77 percent ‘controlling stake’ in India’s largest e-commerce company Flipkart with an investment of around $16 billion.
The deal will value Flipkart at around 20.8 billion dollars, $8.8 billion up from its previous valuation.
“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 eCommerce in the market,” said Doug McMillon, Walmart’s president and chief executive officer, in a statement.
“Our investment will benefit India providing quality, affordable goods for customers while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs,” he added.
In the statement, Walmart and Flipkart said they were in talks with other investors to join in the round. Google’s Alphabet is said to be among the investors that are looking to back the Indian online retail giant.
Binny Bansal, Group Chairman at Flipkart, will continue at the company post the investment, while partner Sachin Bansal will be giving away his 5.96 percent stake in the company which will amount to around $1.23 billion.
Softbank, Naspers, IDG and other large investors in Flipkart will also completely exit through this deal.
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,” said Binny Bansal, Flipkart’s co-founder and chief executive.
Walmart will help Flipkart take on its rival Amazon, which has invested billions of dollars into the country over the past five years in a bid to dominate the country’s online retail space.
Also read: Sachin Bansal to exit Flipkart: ET