Two major pieces of news from eCommerce giant Flipkart on May 4 say that it bought back $350 million in more than 1.8 million shares, and it’s 73% being acquired by Walmart, a much-anticipated deal. There are also reports that Amazon made a formal bid little higher than Walmart to buy the majority stake in Flipkart.
As for facts, the report of Flipkart buying back from minority investors comes from its filing with the Accounting and Corporate Regulatory Authority of Singapore. This helps the company to be a private one under the laws of the country. It is well valued at $17.69 billion!
As for the bigger news, Flipkart is finally being acquired, well… not all of it, by none other than Walmart. The 73% stake deal hovers over Flipkart’s total $20-22 billion valuation. Accordingly, Walmart gets to pay between $14-16 billion for its stake in Flipkart.
FactorDaily reports that Walmart will need to give at least $14.6 billion in cash and the rest in the form of stock. According to sources, Google’s parent Alphabet Inc with about $3 billion of investment, is engaged in the deal.
As per Bloomberg’s report, Flipkart approved Walmart’s offer to acquire 75% at a valuation of $15 billion. The same report further includes that SoftBank is selling its entire 25% stake (about $5 billion in value) in Flipkart and will no more take part in the future. This deal will seemingly close within 10 days.
Kalyan Krishnamurthy will likely stay on as CEO of Flipkart after the deal. One of the co-founders, Sachin Bansal, is expected to exit the company entirely. The other co-founder Binny Bansal, may remain in certain ways. Walmart is likely to retain only one of the two!
As it stands, most of Flipkart’s investors are reported to be open to the Walmart deal. The biggest single investor SoftBank (on the way to exit) may have apprehensions on the deal that encouraged the offer from Amazon. Many other shareholders of Flipkart are said to be leaving as well, with Shekhar Kirani of Accel in the list, and a large number of pension funds, etc.!
Stay tuned for further reports on market movements!