SoftBank sets to bag $4 Bn exit from Walmart-Flipkart deal

SoftBank

After a long discussion and hurdles, it seems SoftBank is willing to take an exit from Flipkart, who infused a staggering $2.5 billion in the Indian e-commerce giant. As of now, Japan’s tech titan has been a major hurdle in the biggest deal in the Indian e-commerce history.

According to a Bloomberg report, the proposed deal is about to close and Walmart may get $4 billion in return for selling about 20 per cent stake in less than 8 months of investment in Flipkart.

Though the amount is not so big for the vision fund, still, it will be considered as a handsome exit for the Masayoshi Son-led firm.

The latest report also comes with some additional insights especially on the stakes acquisition by Walmart as well the valuation of the SoftBank-backed online marketplace.

The previous reports have been saying that Walmart will acquire a little over 50 per cent controlling stakes in Flipkart on the estimated valuation of $18 billion. Now, the global retail giant is expected to acquire 60 to 80 per cent in the Bengaluru-based company.

Notably, the deal would likely to value Flipkart at about $20 billion.

During the earlier talks, Flipkart’s board had considered Walmart and Amazon as potential partners but ultimately decided to go with Walmart.

Furthermore, a separate report also mentioned that SoftBank Group Corp. needs money — its balance sheet is debt-heavy and a planned IPO this year of its Japanese telecom company will only go some way to lightening the load.

However, the dilution of stakes will be done from vision fund, not the group, so the cash shouldn’t flow to the listed entity. Instead, it’ll go back into a pile of cash funded by the governments of Saudi Arabia and the United Arab Emirates, mentions the report.

Apart from SoftBank, Tiger Global owns little more than 20 per cent, Naspers holds nearly 13 percent stake while Accel has about 6.4 percent shareholding in the company. Flipkart’s founders have around 5 per cent stake each in the company.

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