The US retail company Walmart is making their way into the Indian online shopping market after acquiring Bengaluru-based e-commerce company Flipkart in a $16bn (£11.8bn) deal.
Walmart will invest $16bn in Flipkart, which is India's largest online shop, for the controlling stake of more than 77 per cent. This includes buying out SoftBank, which is one of Flipkart's biggest shareholders, and take over the quarter stake it had in the company.
Chief Executive Officer (CEO) of SoftBank Group Masayoshi Son announced this on a SoftBank earnings conference call ahead of the official announcement, according to Reuters.
The remaining shareholders in Flipkart include Microsoft Corp, Tiger Global Management LLC and co-founder of Flipkart Binny Bansal.
Walmart CEO Doug McMillon said in the official announcement: “India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of e-commerce in the market.”
Amazon had last week also shown interest in buying the Indian company as it is its main competitor in India, presenting Flipkart with an offer for 60 per cent of its shares. Flipkart's decision to accept Walmart's offer will weaken Amazon's presence in India significantly.
Flipkart was started in 2007 by Sachin Bansal, who is now chairman, and Binny Bansal who were both employees of Amazon before deciding to start on their own and have grown Flipkart into the biggest online shopping presence in India.