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

Flipkart’s group CEO Binny Bansal who will also take on the role of chairman after Sachin Bansal’s exit and CEO Kalyan Krishnamurthy are expected to remain at Flipkart after the deal goes through

Flipkart’s group CEO Binny Bansal who will also take on the role of chairman after Sachin Bansal’s exit and CEO Kalyan Krishnamurthy are expected to remain at Flipkart after the deal goes through

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.

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