Flipkart planning to go private with buying shares back from Small Investors

Walmart will buy at least 55% of Flipkart in a deal that will value the company at $20-21 billion

Sources report that, though Flipkart's team favors the Walmart deal-in which Walmart would acquire a controlling stake of the company, but allow Flipkart to retain its current structure and management team-Amazon's formal offer to purchase 60 percent of the company and "merge the companies entirely" may be a tempting alternative. Walmart will get a majority of its stake by purchasing shares from existing Flipkart investors at a discount to the $20-21 billion tag, they said.

Interestingly, Lore and the co-founders of Flipkart - Sachin Bansal and Binny Bansal - have all worked for Amazon in the past.

Two sources close to the matter, asking not to be named, confirmed to Reuters on Wednesday that Amazon was interested in buying Flipkart, but declined to give further details. Rival Amazon is making a last ditch effort to avert a formidable combine of its competitors.

The Flipkart Group, which includes Myntra and Jabong, has a combined market share of over 39.1% as compared to Amazon's 31.1% in the Indian online retail market, says a recent Forrester Research report.

Flipkart was last valued at about $12.5 billion when it raised $2.5 billion from Masayoshi Son's SoftBank Vision Fund in August 2017.

Flipkart has also been negotiating a deal with Walmart, the $500-billion multinational retail chain which is ranked as the world's largest company by revenue, and has been looking to establish a footprint in India. The Walmart-Flipkart deal would be Form 1 and an Amazon-Flipkart deal Form 2, said legal experts.




This news is coming when Walmart is investing a big amount in Flipkart to Buy 52% -86% share in Flipkart.

Amazon is the second-largest e-commerce player in India and Flipkart's primary rival.

According to the same source, Amazon's bid is likely to be on par with Walmart's. Adeal with Flipkart would step up the Walmart-Amazon battle for a bigger share of India's fledgling e-commerce market, which Morgan Stanley estimates will be worth $200 billion in a decade.

The transaction could be structured in such a way that Walmart increases its ownership in Flipkart over time, they said.

The source said on condition of anonymity that a deal could take at least a month to be signed.

Walmart is expected to gain three to four seats on Flipkart's ten-member board.

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