After weeks of deliberation, SoftBank has agreed to sell its entire 21% stake in Indian ecommerce major Flipkart to Walmart.
SoftBank’s Vision Fund invested nearly $2.5 billion in Flipkart last year and with the Walmart-Flipkart deal, this investment is expected to double its returns.
Even though it was reported earlier that SoftBank would be exiting the ecommerce company post the deal with Walmart, CEO Masayoshi Son needed time as he was undecided, both because of Flipkart’s potential now and because of possible tax issues.
Economic Times reports that SoftBank has now decided to work out tax issues and sell the stake.
Walmart acquired a controlling 77% stake in Flipkart for nearly $16 billion in a deal that saw not just SoftBank, but Naspers and Flipkart’s co-founder Sachin Bansal exiting the firm.
Interestingly, even when talks were on for this deal, SoftBank had expressed its reservation to sell its stake in Flipkart to Walmart.
It had even tried to sell its portfolio company Snapdeal to Flipkart, which failed post several rounds of negotiations. After the deal failed to go through, SoftBank invested nearly $2.5 billion in Flipkart.
SoftBank has been betting big on the Indian market and has invested in several companies including Ola, Oyo, Snapdeal and most recently Paytm Mall.
ET reports that by selling its entire stake in Flipkart, SoftBank could be freed from a clause in its agreement with Flipkart that restricts it from investing more than $500 million in Paytm Mall until 2020.
After having invested $400 million in Paytm Mall in April this year, it has been in talks to invest up to nearly $3 billion. SoftBank currently owns 21% stake in Paytm Mall.
Meanwhile, Google’s parent company Alphabet is still undecided over picking up 10% stake in Flipkart for around $2 billion as its weighs the pros and cons of deal. Tiger Global and Walmart, however, are keen on having Google on board.