Let's move on! Walmart acquires 77% of Flipkart for $16 Bn

Finally, the curtain has been lifted from Walmart-Flipkart story. The Indian e-commerce giant has been acquired by US-based retail major. After a long discussion and speculations over deal size and valuation, Walmart has announced it officially.

Walmart has acquired 77 per cent stake in Flipkart for a whopping $16 billion. The remainder of the business will be held by some of Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp, reveals the company's statement.

Walmart’s investment includes $2 billion of new equity funding. Besides, both are also in discussions with additional potential investors who may join the round, which could result in Walmart’s investment stake moving lower after the transaction is complete.

Tencent and Tiger Global will continue on the Flipkart board, joined by new members from Walmart. The final make-up of the board has yet to be determined, added the official statement.

Image creditFlipkart

The deal will also give an upper hand to Walmart, which has been involved in a long fighting journey with Amazon in the US.

Following the deal, Walmart may invest $2-3 billion in Flipkart to take on other e-commerce players in India. According to a CNBC TV18 report, Walmart has also said that it will take Flipkart public and make it a majority-owned subsidiary in a few years.

Meanwhile, Flipkart co-founder Sachin Bansal has quit the company by selling his 5.5 per cent stake for little over Rs 6,700 crore. South African Internet and entertainment firm Naspers also sold its entire 11.18 percent stake in Indian e-commerce firm Flipkart to Walmart for $2.2 billion

Of late, Flipkart bought back $350 million worth of shares from its investors to convert its Singapore-incorporated company into a private limited firm.

The deal also comes with serious questions over flouting FDI norms, Predatory pricing and other concerns raised by vendors and sellers of the online marketplace platform.

Despite the assurance of Walmart to keep Flipkart remain local, sellers association, swadeshi lobby led by the Swadesh Jagaran Manch and Confederation of All India Traders (CAIT) has demanded a probe into the Walmart Flipkart deal.

Update: We have updated the article with the latest development.