Deal worth $16 billion, Sachin Bansal resigns and other key developments

039;Flipkart founders may be liable for 20% capital gains tax after stake sale to Walmart'

039;Flipkart founders may be liable for 20% capital gains tax after stake sale to Walmart'

In one of the largest merger and acquisition deals struck in India, Walmart Inc has signed definitive agreements to pick up an initial stake of 77 per cent in Flipkart, valuing the e-commerce giant at just over $20.8 billion.

Here's all you need to know about what Flipkart is, its valuation, recent acquisition by Walmart and what the repercussions could be for both Indian consumers and rival Amazon.

From selling books online to striking a jaw-dropping $16 billion deal with the world's largest retailer, Walmart, all within 11 years, Flipkart has given Asia's third largest economy its biggest startup success story - one that will be quoted by starry-eyed entrepreneurs for years to come.

"As Flipkart is expected to generate meaningful losses for at least the next few years, this is clearly an investment for the future, and when viewed in tandem with the recently-announced sale of a majority stake in Asda, is indicative of Walmart's long-standing strategy of shifting resources into higher growth potential markets and segments when opportune", O'Shea said.

With Microsoft already being an investor in Flipkart, Alphabet is expected to invest almost $2 billion in the deal in an effort to fight Amazon across the globe.

Flipkart co-founder and Group CEO Binny Bansal said the deal was of huge importance for India and would help fuel the company's ambition to deepen its connection with buyers and sellers.

In terms of the e-commerce space, he says, at the moment, the e-commerce market in India is still too small.

U.S. retail behemoth Walmart was yesterday expected to announce that it is to buy a majority stake in Flipkart for about US$15 billion. "Walmart's link with Flipkart has changed great deal of equation for the company and its investors", Saurav Srivastav, Indian Angel Network told the channel and added that the move will open opportunities for Walmart to experiment in a big market. Walmart will retain a 42 percent stake in that combined company.

Walmart initially entered the Indian market in 2007 through a joint venture with a local company, years before Amazon debuted there. The country's e-commerce market is expected to experience explosive growth in the coming decades, so any retailer should see it as a covetable prize. - Supporting small business and "Make in India", through direct procurement as well as increased opportunities for exports through global sourcing and eCommerce. Walmart and Amazon share a fierce rivalry back home.

McMillon, while addressing a town hall at Flipkart's headquarters in Bengaluru, said Flipkart's Chief Executive Officer Kalyan Krishnamurthy and Group CEO Binny Bansal would continue in their current roles, according to three sources at the event.

2- As part of the deal, Sachin Bansal, who is the co-founder the Flipkart, is leaving the company. No other market except China and USA can compete in terms of total retail opportunity. Once the sale is completed, eBay will also be terminating the strategic relationship with Flipkart established only past year.

Recommended News

  • First finalists of Eurovision 2018 to be named on 8 May

    First finalists of Eurovision 2018 to be named on 8 May

    Alekseev has noticed that he feels this support, and to submit to the song contest "Eurovision" in Belarus it is a great honor. Albania were a surprise finalist, as their entry Mall by Eugent Bushpepa divided opinion and wasn't considered a favourite.
    Sonam dances, shares lovely moment with Anand at Mehendi, parents enjoy too

    Sonam dances, shares lovely moment with Anand at Mehendi, parents enjoy too

    Anand and Sonam have been dating for four years and they never spoke about their relationship publically. Anand reportedly proposed her just one month after their first meeting, and Sonam accepted the proposal.
    Sanders Plays 'The Woman Card' To Drum Up Support For Gina Haspel

    Sanders Plays 'The Woman Card' To Drum Up Support For Gina Haspel

    A Central Intelligence Agency spokesperson told CNN on Sunday, "There has been a fascinating phenomenon over the last few weeks". Leonnig, Shane Harris and Josh Dawsey of The Washington Post; and by Zeke Miller and Deb Riechmann of The Associated Press.
  • Market Now: Smallcaps outperform Sensex; GVK Power among top gainers

    Market Now: Smallcaps outperform Sensex; GVK Power among top gainers

    Mahindra and Mahindra, ICICI Bank and GAIL were top gainers, while Coal India , Dr Reddy's and Lupin incurred maximum losses. ICICI Bank had on Monday reported that its net profit for January-March nearly halved to Rs 1,020 crore.
    Cynthia Nixon Releases Tax Returns to Public

    Cynthia Nixon Releases Tax Returns to Public

    The couple netted more than $125,000 in capital gains and were paid almost $33,000 in dividends from investments. Cuomo's aides have said the governor is referring to his upbringing in Queens before his father, Mario M.
    Semi-final elation for Real Madrid and Liverpool [GALLERY]

    Semi-final elation for Real Madrid and Liverpool [GALLERY]

    Benzema's two goals here were another feather in the cap for coach Zinedine Zidane , who had chose to start the French striker, despite only one goal in his previous 12 games.
  • Facebook bans all referendum ads paid for by foreign sources

    Facebook bans all referendum ads paid for by foreign sources

    Helen Dixon, the Irish data protection commissioner, warned last month foreign actors could try to sway the much-anticipated poll. Facebook was responding to criticism that unaccountable foreign advertising is gaining traction in the referendum campaign.
    Boeing, Airbus, GE among biggest losers from US Iran shift

    Boeing, Airbus, GE among biggest losers from US Iran shift

    Boeing never closed its transaction with Iran Air, and downplayed the historic deal's prospects after Trump took office. While the Airbus deal is not necessarily totally dead, prospects for filling it are "not great", he said.
    Walmart tightens its opioid prescription policies

    Walmart tightens its opioid prescription policies

    The Walmart logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 1, 2018. The CDC publishes MME conversion guides to help pharmacists figure out the right dosage for each type of prescribed opioid.
  • Washington County Election Commission 'unintentially' violates election laws in county primary

    Postmarks are not always affixed by the Post Office, so mail absentee ballots early enough so that it arrives by Election Day. Just one school board seat, District 3, had a primary, along with only one countywide race, that of Clerk of Superior Court.
    Blanchett thinks #MeToo will take time to bring change in Hollywood

    Blanchett thinks #MeToo will take time to bring change in Hollywood

    In the festival's Un Certain Regard section is "Rifiki", a lesbian romance from Kenya that has already been banned at home. Such was the refreshing, no-nonsense tone that Blanchett set Tuesday at the Palais des Festivals and Congresses.
    Italian Elia Viviani secures second consecutive stage win in Giro D'Italia

    Italian Elia Viviani secures second consecutive stage win in Giro D'Italia

    The driver of the "Quick-Step Floors" Elia Viviani won the third stage of the Italian stage race with the finish line in Eilat. On Sunday evening, the riders and support teams will fly to Sicily for a rest day on Monday and resume the tour on May 8.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.