Walmart buys Flipkart for 16 billion dollars

Hours before Walmart Inc. was scheduled to unveil the largest acquisition deal with Flipkart, CEO of SoftBank Group Corp. spilled the beans in Tokyo

e4m by exchange4media Staff
Updated: May 9, 2018 3:56 PM

Walmart’s interest in India has been the talk of the town. Hours before the stage was set for the $500 billion US retail giant Walmart to buy 70 per cent-75 per cent stake in online retailer Flipkart, Masayoshi Son, chief executive officer of SoftBank Group Corp., spilled the beans to a roomful of investors and journalists in Tokyo. He confirmed that the American retailer has agreed to buy control of Flipkart Online Services Pvt, the leading Indian e-commerce player backed by SoftBank. “I think we announced it last night,” he said, during an investor call after his own company’s earnings. “If not, well then that means I’m just spouting this out. In any case, it’s been decided.”

Walmart has signed a definitive agreement to acquire about 75 percent of online retailer Flipkart and a formal announcement is expected in no time. According to media reports, the two companies have signed a term sheet, an agreement defining the contours of the transaction. Under the deal, Walmart will likely buy 70-75 percent of online retailer Flipkart for about USD 15 billion.

SoftBank, the Japanese company, through its Vision Fund, invested $2.5 billion in Flipkart and that stake will be worth about $4 billion in the deal. Son didn’t elaborate on other terms of the Walmart takeover. According to sources, the deal values Flipkart at about $20 billion.

After his initial comments, Son noticed a sheet of paper that had been left on the podium for his attention. He picked it up and smiled. “Oh, I see here that the Flipkart-Walmart deal isn’t fully confirmed at this point in time,” he said to the laughing audience. “Yabai desune,” he added, which translates in Japanese roughly to “Oops” or “That’s not good.”
“What should I do?” he said. “Well, I said it. I can’t take it back. So that’s it.”

Flipkart, India’s biggest online retailer, is a key part of Walmart’s efforts to expand in the country and strike a blow against Amazon.com Inc. in the world’s second-most populous nation.

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