SoftBank CEO confirms Walmart-Flipkart deal, official announcement to follow

Masayoshi Son said that it has reached an agreement to sell its stake in Flipkart to Walmart and that its stake will be worth $4 billion post the deal.
SoftBank CEO confirms Walmart-Flipkart deal, official announcement to follow
SoftBank CEO confirms Walmart-Flipkart deal, official announcement to follow
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After months of negotiation, SoftBank CEO Masayoshi Son has confirmed that Walmart has agreed to buy a controlling stake in Flipkart Online Services. SoftBank is a major shareholder in Flipkart after it invested $2.5 billion through its Vision Fund last year.

According to a Bloomberg report, Son said during an earnings briefing that it is a done deal and that its stake will be worth $4 billion post the deal. However, the exact terms of the deal – which is expected to be announced later on Wednesday – are not known yet.

According to reports, Walmart CEO Doug McMillon arrived at the Flipkart headquarters in Bengaluru on Wednesday to announce the deal.

In what is being seen at Walmart’s second attempt to enter India’s retail market, the US-based retail giant is set to acquire over 70% of Flipkart and take on its global rival Amazon. Walmart is expected to shell out nearly $12 billion for the deal, which is expected to value Flipkart at around $20 billion.

According to a Bloomberg last week, Flipkart’s board agreed to sell a majority stake to Walmart in a deal that will see SoftBank selling all of its stake in the ecommerce major. Naspers too is likely to exit completely while other major investors such as Tencent, Microsoft and Tiger Global are likely to exit partially.

FactorDaily report last week stated that the deal will be a cash-and-stock buyout for around $14.6 billion. The cash component is expected to be close to 55% with the exit of some of the large investors including SoftBank.

Google’s parent Alphabet too will be participating in the deal and will pump in around $3 billion to pick up roughly 10% stake.

As per media reports, Walmart will be retaining Flipkart’s management led by co-founder Binny Bansal, while Sachin Bansal will be exiting the company selling his entire 5.5% stake to Walmart. Sachin Bansal was the co-founder and CEO at Flipkart for nine years.

Walmart is also expected to be investing in creating a back-end infrastructure to boost the country’s farm sector.

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