Bengaluru: Walmart Inc. announced it has signed definitive agreements to become the largest shareholder in Flipkart Group (“Flipkart”). The investment will help accelerate Flipkart’s customer-focused mission to transform commerce in India through technology and underscores Walmart’s commitment to sustained job creation and investment in India, one of the largest and fastest-growing economies in the world.
Subject to regulatory approval in India, Walmart will pay approximately $16 billion for an initial stake of approximately 77 percent in Flipkart, formally Flipkart Private Limited, the Arkansas-based firm said in a statement from the US.
The acquisition of the majority stake makes Walmart the largest shareholder of the city-based Flipkart group and its investment will help accelerate its customer-focused mission to transform e-commerce in India through technology.
Walmart to Invest in Flipkart Group, India’s Innovative eCommerce Company
Read all about it: https://t.co/m3MUgAyqiZ pic.twitter.com/XFkiXxL7sB
— Flipkart (@Flipkart) May 9, 2018
“The investment underscores our commitment to sustained job creation and investment in India, one of the largest and fastest-growing economies in the world,” it said.
The remainder of the business will be held by some of Flipkart’s existing shareholders, including co-founder Binny Bansal, Tencent Holdings Ltd, Tiger Global Management LLC and Microsoft Corp.
“Though the focus will be on serving customers and growing the business, Walmart supports Flipkart’s ambition to transition into a publicly-listed, majority-owned subsidiary in the future,” the statement said.
The mega deal will give Walmart an opportunity to partner with the local leader in a large, fast-growing market, as the e-tailer leadership team will be supported by the other investment partners.
“The deal also underscores Walmart’s long-term commitment to India, where it looks to serve customers, support job creation, small businesses, farmers and women entrepreneurs.”
“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. “As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market. We are also excited to be doing this with Tencent, Tiger Global and Microsoft, which will be key strategic and technology partners. We are confident this group will provide Flipkart with enhanced strategic and competitive advantage. 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.”
Founded in 2007, Flipkart has led India’s eCommerce revolution. The company has grown rapidly and earned customer trust, leveraging a powerful technology foundation, including artificial intelligence, and emerging as a leader in electronics, large appliances, mobile and fashion and apparel. The Flipkart Group is one of India’s largest e-commerce marketplace and includes group companies Flipkart, Myntra, Jabong, and PhonePe.
While Walmart and Flipkart will leverage the combined strengths of both companies, they will maintain distinct brands and operating structures.