The report suggests Amazon may offer to buy Flipkart

Apr 04 2018 05:30 PM
The report suggests Amazon may offer to buy Flipkart

According to the recent report, Amazon.com Inc may make a competing offer to buy e-commerce firm Flipkart +, which is in tie-up talks with Walmart Inc, as the two US retail companies jostle for dominance in India's booming online industry.

Amazon earlier also discussed to buy control of Indian rival Flipkart but a deal with Walmart is more likely, a newspaper report said, citing people with knowledge of the matter.

On the other hand, Walmart is in talks to buy over 40 percent of Flipkart in potentially one of its biggest overseas deals, Reuters reported in February. A deal would give the world's largest brick-and-mortar retailer access to an e-commerce market that Morgan Stanley estimated to be worth $200 billion in a decade's time.

The deal would also represent a direct challenge to Amazon in Asia's third-largest economy. Amazon has committed to investing $5 billion in India as it expands into online grocery delivery.

Walmart will buy a majority stake in Flipkart through a mix of primary and secondary share purchases in a deal that could value the Indian firm at $21 billion, the newspaper reported. 

Flipkart, founded by former Amazon employees Sachin Bansal and Binny Bansal in 2007, controls nearly 40 percent of India's online retail market, ahead of Amazon, showed estimates by researcher Forrester. Like Amazon founder Jeff Bezos, the pair began by selling books and diversified rapidly, including by selling smartphones through exclusive flash sales. Flipkart now competes with Amazon in almost all product categories.


 

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