By Saritha Rai
Walmart Inc. is close to finalizing a deal to buy a majority stake in India’s leading e-commerce company for at least $12 billion and may complete the agreement in the next two weeks, according to people familiar with the matter.
All the major investors in Flipkart Online Services Pvt are now on board with the Walmart purchase, after an earlier debate over whether to sell to Amazon.com Inc., said the people, asking not to be named because the matter is private. Tiger Global Management will sell nearly all its 20 percent stake in Flipkart, while SoftBank Group Corp. will sell a substantial part of its 20 percent-plus holding, the people said. Walmart will likely end up with 60 percent to 80 percent of Flipkart, which will be valued at about $20 billion, they said.
Among the issues that still need to be resolved are what happens to Flipkart’s founders and who will lead Flipkart after the purchase, they said. The amount each existing investor sells and the size of Walmart’s final stake still need to be finalized, they said. It’s also possible that terms will change or the talks will fall apart.
If completed, the deal would give Walmart a substantial foothold in an emerging market of 1.3 billion people. The Bentonville, Arkansas-based company is the world’s largest retailer, but it has struggled against Amazon as consumers increasingly migrate to online commerce. India is the next big potential prize after the U.S. and China, where foreign retailers have made little progress against Alibaba Group Holding Ltd.
Walmart declined comment. Flipkart didn’t immediately respond to requests for comment.
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