After long months of negotiation and days after getting an approval from the Competition Commission of India, Walmart said it has completed the $16 billion purchase of India’s largest e-commerce firm Flipkart.
It stated that the existing management team of Flipkart which is led by CEO Kalyan Krishnamurthy will continue to manage the business. Current investors Tencent Holdings Ltd and Tiger Global Management will also remain present on the Flipkart board. Apart from the independent board members, Walmart will appoint new board members.
The CCI approved the Flipkart Walmart deal despite the protests from numerous traders across the country over the fears that this deal would drive a number of retailers out of business. Further, CCI stated that the discounting practices followed by Flipkart should be dealt separately as it is an issue which assumes significance in the new draft policy. It also proposes further restrictions on discounting by online retailers. The country has already banned discounting by online marketplaces.
JudithMcKenna, president, and CEO of Walmart International stated that Walmart and Flipkart together will be able to achieve much more than each could accomplish separately in order to contribute to the economic growth of the country. This will create a strong local business which will be powered by Walmart. This investment is expected to benefit India by providing high quality and affordable goods to the customers while creating skilled jobs and opportunities for the suppliers. Walmart strives to make life easier for the customers and is delighted to work with Flipkart to grow in the country which is the fastest growing and the most attractive retail market in the world.
Walmart had stated earlier that it would acquire 77% of Flipkart for $16 billion. This valued Flipkart at $21 billion. Binny Bansal, co-founder, and CEO stated that they are ready to deliver the full value of the partnership in the country. The combination of Walmart’s omnichannel expertise and supply chain knowledge with the talent, technology and local experience of Flipkart, they strive to drive the next wave of retail in the country.
This buyout is the biggest acquisition by Walmart and is the largest e-commerce deal globally. It has marked an end of the era for Flipkart co-founder and chairman Sachin Bansal who left the company after selling 6% stake for $1 billion. Binny Bansal, the other founder of Flipkart continues as the CEO and Kalyan Krishnamurthy will remain the CEO. There will be intense competition between Amazon and Walmart-Flipkart in the Indian e-commerce market.