Walmart acquires a stake of 77% in Flipkart with $16 billion investment. Walmart, the world’s largest retailer on Wednesday confirmed the acquisition deal of buying a majority stake in Flipkart, India’s leading e-commerce platform.
The investment will give the American retailer a direct link to a market which is expected to be value $20.8 billion when the deal closes. The deal is biggest of its kind that Walmart has made in its history, replacing Asda in the UK.
Walmart informed its shareholders that this year, the investment would lessen its net income by at least $750 million and by more than twice that amount next year. At other side, Flipkart investors and many of its employees will receive heavy profits from the deal with Walmart.
Walmart already operates 21 Best Price cash-and-carry stores as well as one fulfillment center in 19 cities across nine states in India. And now, it seems like American retailer may expand its wholesale operations. Tencent and Tiger Global will continue to be investors the company, with new members from Walmart.
Flipkart’s co-founder and group chief executive officer, Binny Bansal, said, “This investment is of immense importance for India and will help fuel our ambition to deepen our connection with buyers and sellers and to create the next wave of retail in India.”
“Walmart is the ideal partner for the next phase of our journey, and we look forward to working together in the years ahead to bring our strengths and learnings in retail and eCommerce to the fore,” he added.