Post several months of negotiation, Masayoshi Son, the SoftBank CEO, has confirmed that Walmart has to give nods to buy a controlling stake in Flipkart Online Services.
The SoftBank is a most important shareholder in Flipkart post, it invested $2.5 billion throughout its Vision Fund last year in 2017.
As per the Bloomberg report, Son stated this during an earnings briefing which is a done deal and that its stake will be worth of the $4 billion post the deal.
Though, the exact terms of the deal – that is expected to be declared later on Wednesday – are not known yet.
Walmart – Flipkart Deal
As per the reports, the Walmart CEO Doug McMillon arrived at the Flipkart headquarters in Bengaluru on the Wednesday in order to declare the same deal.
This is being witnessed at the Walmart’s second attempt to enter India’s retail market, the US-based retail giant also seems like going to acquire over 70% of Flipkart and take on its global rival Amazon.
The Walmart is also expected to shell out nearly $12 billion for the deal that is anticipated to have the same value of the Flipkart at around $20 billion.
According to a Bloomberg last week, Flipkart’s board agreed to sell a majority stake to Walmart in a deal where there will be SoftBank selling all of its stake in the e-commerce major also.
Naspers also seems like, to exit completely while other major investors such as Tencent, Microsoft, and Tiger Global are going to exit partially.
On the last week, a Factor Daily report said that the deal will be a cash-and-stock buyout for around $14.6 billion. The cash component is reported, going to close to 55% with the exit of some of the large investors together with SoftBank.
Google’s parent Alphabet also will be taking part in this deal and will pump in around $3 billion in order to pick up roughly 10% stake.
As per media reports, Walmart will be retaining Flipkart’s management led by co-founder Binny Bansal, while Sachin Bansal will be leaving the company selling his entire 5.5% stake to Walmart. Sachin Bansal was the co-founder and CEO at Flipkart for around 9 years.
Walmart is also going to be investing in creating a back-end infrastructure in order to boost the country’s farm sector also.
