After the announcement of the Walmart-Flipkart deal, eBay has announced that it will be selling its holdings in Flipkart, which amounts up to approximately $1.1 billion.
In a statement released on Wednesday, the ecommerce giant said that following the close of the transaction, it will be ending its current strategic relationship with Flipkart. This includes unwinding its commercial agreements with Flipkart and terminating Flipkartâ€™s license to use the eBay.in brand.
eBay also announced that it will relaunch eBay India with a differentiated offer to focus initially on the cross-border trade opportunity. â€śWe believe there is huge growth potential for e-commerce in India and significant opportunity for multiple players to succeed in Indiaâ€™s diverse, domestic market,â€ť it said in its statement.
eBay invested $500 million in cash in Flipkart early last year and sold its Indian business to Flipkart, giving it the license to own and operate eBay.in. The deal also included an agreement for cross-border trade opportunities, making eBayâ€™s global inventory accessible to more India consumers, and give eBayâ€™s millions of active buyers globally access to the Indian inventory provided by Flipkart.
However, the deal is being terminated after Walmart bought a controlling stake in the Indian ecommerce major.
In a deal announced on Wednesday, Walmart has acquired roughly 77% stake in Flipkart for approximately $16 billion. While SoftBank and Naspers appear to have exited fully, the rest of the company will be owned by Flipkartâ€™s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management and Microsoft.
Tencent and Tiger Global will continue on the Flipkart board, joined by new members from Walmart. The final make-up of the board has yet to be determined, but it will also include independent members.
Walmartâ€™s investment includes $2 billion of new equity funding. Walmart and Flipkart are also in discussions with additional potential investors who may join the round, which could result in Walmartâ€™s investment stake moving lower after the transaction is complete.