After a long debate over FDI in e-commerce and predatory pricing, Walmart acquisition of Flipkart has been approved by the Competition Commission of India (CCI).
Since the acquisition of 77 per cent stake for $16 billion announced in May, the deal has been widely opposed by traders/sellers bodies (CAIT, AIOVA) as well as political lobby group such as Swadeshi Jagran Manch.
The competition watchdog announced the go-ahead signal on Twitter.
@CCI_India approves proposed acquisition of Flipkart Private Limited by Wal-Mart International Holdings, Inc
— CCI (@CCI_India) August 8, 2018
Although, the traders body, which represents about 70 million merchants has been seeking commerce minister Suresh Prabhu’s intervention in the case to avoid loss funding and predatory pricing and threatened to approach the Supreme Court if the government allowed the deal to go through.
Earlier, in May, Walmart had approached CCI for the approval amidst the protest. It has been keeping a firm stand against all the allegations and claimed that the deal doesn’t raise any competition concerns.
Last month, media reports also said that Walmart would take a longer time to close the deal. It added that the US-based retail major has given itself time till June 7, 2019 to close the deal. In case it fails to complete it, the company will have to repay a significant portion of the bond issued.
This is a big development in the history of e-commerce in India. Henceforth, it would be interesting to watch how the aforementioned representing bodies react to the verdict.
Update: CAIT has condemned the decision by CCI and alleged that it didn’t get any opportunity of hearing. Further, CAIT will go to court against the decision and called for an emergency meeting of its governing council on August 19 in Nagpur.