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Tag: Walmart Flipkart deal

  • CCI approves 16$ bn acquisition of Flipkart by Walmart

    CCI approves 16$ bn acquisition of Flipkart by Walmart

    MUMBAI: The Competition Commission of India (CCI) has approved American retail giant Walmart’s $16 billion acquisition of online marketplace Flipkart. In May, Walmart acquired a 77 per cent stake in Indian e-commerce company.

    With this, Walmart will compete directly with Amazon India in the fast growing e-commerce market. 

    This is the biggest deal for India’s e-commerce sector, which is estimated to grow close to an annual $200 billion in 10 years. The acquisition will give Walmart a strong foothold in Asia’s third largest economy where the company has struggled to expand due to restrictions on foreign investment in retail stores

    In a Twitter post, the CCI has given a heads up to the proposed acquisition of Flipkart by Walmart. The board, in its order, also added that the issue of Flipkart’s discounting practices would be dealt with separately in the upcoming e-commerce policy. 

     

    The regulatory board also mentioned that the discounting practices by Flipkart may have to be reviewed by the relevant authorities, which will put pressure on regulators to clamp down on discounts on online platforms. 

    Responding to CCI’s approval, Walmart said that the company is committed to contributing to the Indian economy by supporting farmers, businesses run by women in India and small and medium suppliers. 

    The statement read: Flipkart is a prominent player in India with a strong, entrepreneurial leadership team that is a good cultural fit with Walmart.

    Soon after the CCI’s approval on the deal, local trader body, Confederation of All India Traders (CAIT) opposed the Flipkart-Walmart deal on the ground that the acquisition will create unfair competition and drive local convenience stores out of business. 

    CAIT’s secretary general Praveen Khandelwal said to Reuters, “We will certainly move the court against the CCI’s decision. CAIT has called an emergency meeting of its governing council on August 19 at Nagpur, where we will finalise our strategy for a nationwide movement.”

  • Walmart sells $16 billion worth of bonds for Flipkart acquisition

    Walmart sells $16 billion worth of bonds for Flipkart acquisition

    MUMBAI: American multinational retail corporation, Walmart, has decided to sell $16 billion worth of bonds to help finance its investment in Indian e-commerce giant Flipkart. 

    Walmart offered fixed- and floating-rate notes in nine parts to Flipkart. The longest bond, a 30-year security, yields 1.05 per cent points above Treasuries, less than the initial 1.2 per cent points that was being pitched earlier in the day. According to a report by Bloomberg, the deal edged out an offering Bayer AG completed two days ago.

    The American giant announced in June that it will acquire 77 per cent stake in the Flipkart Group for $16 billion. This will leave Binny Bansal and other shareholders with 33 per cent of the stake in the company.

    India is the most active and favourite playing field for most e-commerce giants today. With Walmart and Flipkart coming together as one, it will directly compete with Amazon in India. The international e-commerce website has the biggest market share in India which is the fastest growing e-commerce market today.

    Walmart and Flipkart’s deal was led by JPMorgan, Barclays and Citigroup.