Walmart now owns Flipkart; Deal completed at $16B

iPwnz

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Walmart Inc. has decided to go all in on its deal to acquire Flipkart in a deal sealed on Thursday to buy 73% of the Indian ecommerce company in one of the biggest mergers and acquisitions in the country – spending at least $14.6 billion in the cash-and-stock buyout.
One source said Flipkart was valued at $20 billion while two others – one each at the two merging companies – said Walmart, the world’s largest retailer, had put the target company’s value at as much as $22 billion, a price at which it will spend more than $16 billion.
Alphabet Inc., the parent company of search giant Google, is said to be participating in the deal with a $3 billion investment.
Kalyan Krishnamurthy will stay on as chief executive of Flipkart. And while CEO Krishnamurthy will continue to helm Flipkart, one among its two founders – Sachin Bansal, chairman, or Binny Bansal, group chief executive – may exit. Earlier, FactorDaily had reported that Binny Bansal will quit the company. “But, nothing is final,” one of the sources said.
The sources also confirmed that the deal will be a mix of cash and stock. “Cash component will be close to 55%, which will mark the exit of some of the largest investors in Flipkart,” a second source said.
“Some of the friendly investors like Tencent, Microsoft and Tiger Global will not cash out completely,” said the first source. Softbank, which holds a little over 20% stake in Flipkart will exit the company fully and is expected to make $4 billion – a 60% return on its investment of $2.5 million billion merely eight months ago.
The second source added that Flipkart is not the first Indian ecommerce company Walmart checked out. Others like Snapdeal and ShopClues were also probable targets, but Walmart wanted to go with the largest company, despite the size of the deal.
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6pack

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i'm guessing single brand retail will come soon now. slowly Wallmart will bring in their cheap quality brands and close down the small sellers on FK / eBay. eBay india is a FK company, so Wallmart got eBay too in this deal probably.
 
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Futureized

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Worst news i expect for """WHATEVER INDIA""".
Exploitation started years AGO, same way. EVEN before freedom..
"Digitized now" ?

Buy from India, Sell back to India = Profits goes to outsiders..

(few jobs are created, but to enslave) ?
Entire digital trading market goes to both of OUTSIDERS.....

""WHOEVER WINS WALMART OR AMAZON = INDIA LOOSE ""
sure there are supportives here..


 

6pack

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^ you're wrong if you think they will buy from Indian sellers.

Wallmart / Amazon isn't going to buy from India. They will buy from China where it is 10x cheaper and dump it here for almost no profit and destroy local economy and shops.Expect lending rates of shops to decrease in 3-4 years. The same is happening in America. Most of local hardware / electrical / computer shops have gone out of business when such big corporations start selling to people at cheaper than shipping rates. Their local shops closed and people went in debt due to job losses. Even some areas the local realty rates fell down.

Even Ikea is planning huge country wide stores coming up in 2-3 years. If Costco or other wholesale retailers like them make an entry I'm expecting a big crash in housing rates and realty. It could take another 5-10 years or won't even happen. When ever I thought realty would crash, it increased even more and almost doubled in 2-4 years. Mumbai became land of crorepatis in just 5 years.
 

TheProfessor1987

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Difficult days ahead for small vendors. These giants are going to gobble up many local online and offline businesses. I don't know if there is a feasible way to stop this. Capitalism is all about survival of the fittest.
 
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chetansha

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^ you're wrong if you think they will buy from Indian sellers.

Wallmart / Amazon isn't going to buy from India. They will buy from China where it is 10x cheaper and dump it here for almost no profit and destroy local economy and shops.Expect lending rates of shops to decrease in 3-4 years. The same is happening in America. Most of local hardware / electrical / computer shops have gone out of business when such big corporations start selling to people at cheaper than shipping rates. Their local shops closed and people went in debt due to job losses. Even some areas the local realty rates fell down.

Even Ikea is planning huge country wide stores coming up in 2-3 years. If Costco or other wholesale retailers like them make an entry I'm expecting a big crash in housing rates and realty. It could take another 5-10 years or won't even happen. When ever I thought realty would crash, it increased even more and almost doubled in 2-4 years. Mumbai became land of crorepatis in just 5 years.
The worst part is this is being wholly supported by modi govt.
Try to see lok sabha videos how sushma and her party member vehemently opposed fdi in everything citing loss to local vendors etc.
Bloody Hypocrites
 

iPwnz

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Difficult days ahead for small vendors. These giants are going to gobble up many local online and offline businesses. I don't know if there is a feasible way to stop this. Capitalism is all about survival of the fittest.
Note that online companies are most active in tier 1 cities and some tier 2 towns. They probably won't care much for the rest. B&M stores can use this space. Also online services are still not very good in India so for many people they'd rather stick to local physical stores.
 

rdst_1

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Note that online companies are most active in tier 1 cities and some tier 2 towns. They probably won't care much for the rest. B&M stores can use this space. Also online services are still not very good in India so for many people they'd rather stick to local physical stores.
Wrong. I live in a village in Himachal and apart from the heavy appliances, Amazon delivers everything over there as they do in a Tier-1 city. Delhivery is godsent for any e-commerce site as they have established a very vast and efficient network all over India very quickly. So even here, B&M stores will start suffering and even more badly because these stores are used to selling at MRP. I got all my monthly supplies delivered from Amazon last month because a) I got the choose from a vast number of choicrs and b) got it for a whole lot cheaper than what I would have gotten them locally.
Now, I only buy medicines and fruits and veggies from my local shops. Every other type of store is as good as non-existent for me apart from emergency.
These stores will however, survive for much longer than their counterparts in cities as the older generation and even the present young folks are noy keen in online shopping, but, the trend is changing very rapidly.
 

chetansha

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Wrong. I live in a village in Himachal and apart from the heavy appliances, Amazon delivers everything over there as they do in a Tier-1 city. Delhivery is godsent for any e-commerce site as they have established a very vast and efficient network all over India very quickly. So even here, B&M stores will start suffering and even more badly because these stores are used to selling at MRP. I got all my monthly supplies delivered from Amazon last month because a) I got the choose from a vast number of choicrs and b) got it for a whole lot cheaper than what I would have gotten them locally.
Now, I only buy medicines and fruits and veggies from my local shops. Every other type of store is as good as non-existent for me apart from emergency.
These stores will however, survive for much longer than their counterparts in cities as the older generation and even the present young folks are noy keen in online shopping, but, the trend is changing very rapidly.
The discounts we get do not reflect the actual market price. It is being subsidised by Amazon directly. If you see latest reports all 3 have made huge losses. And it is unhealthy in short term (small vendors will suffer now) and dangerous in longterm ( we buyers will suffer later)
 

6pack

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The worst part is this is being wholly supported by modi govt.
Try to see lok sabha videos how sushma and her party member vehemently opposed fdi in everything citing loss to local vendors etc.
Bloody Hypocrites
yup, wasn't she the one saying we Indian's should start learning Chinese? Maybe like North and South Korea unification, India and China unification on cards.
 
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rdst_1

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The discounts we get do not reflect the actual market price. It is being subsidised by Amazon directly. If you see latest reports all 3 have made huge losses. And it is unhealthy in short term (small vendors will suffer now) and dangerous in longterm ( we buyers will suffer later)
In my case, the discounts are not the pulling force behind me opting for online shopping rather than the B&M stores. It is the vast amount of choices that are not available to me otherwise that makes me prefer Amazon over my local stores. The discounts are just an added bonus and I will continue using services like Amazon even if they were to start selling at MRP.
 

adventureguy

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Does this mean flipkart is no longer an Indian company?
Flipkart is even registered in singapore. not india :)

btw many studies show that due to our large population, even with entry of these big giants, local shops should survive. lets see
 

vivek.krishnan

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In my case, the discounts are not the pulling force behind me opting for online shopping rather than the B&M stores. It is the vast amount of choices that are not available to me otherwise that makes me prefer Amazon over my local stores. The discounts are just an added bonus and I will continue using services like Amazon even if they were to start selling at MRP.
+1.

Additionally, its not like all the people are going to be suddenly un-employed. There is an increase in the number of delivery employees hired as well.
 
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adventureguy

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^ delivery boys earn 10k~20k per month. Even if these people are employed, their standard of living isn't going to be improved that much