Amazon offers to buy 60% stake in India’s Flipkart

Published on: 3rd May 2018

Move threatens to complicate Walmart’s bid to buy a majority stake in the Indian e-commerce player.

Sources told Reuters earlier this month that Walmart was likely to reach a deal to buy a majority stake in Flipkart, Amazon’s biggest competitor in India, by the end of June for $10b to $12b.

The deal would be the US retail giant’s biggest acquisition of an online business and would kick off a battle with Amazon in an Indian e-commerce market that analysts forecast will be worth $200b a year within a decade.

CNBC-TV18 reported that Amazon had offered Flipkart a breakup fee of $2b to convince it to discuss an offer which analysts say would bring with it substantial antitrust challenges, as Flipkart and Amazon dominate the online shopping space in Asia’s third-largest economy.

Two sources close to the matter, asking not to be named, confirmed to Reuters that Amazon was interested in buying Flipkart, but declined to give further details.

One of the sources said that Flipkart had vetoed an approach from Amazon for a 51-55% share in the company two years ago, judging its offered price as far too low at the time.

“Now with Walmart in the mix things are different,” the source said. “To the best of my knowledge no decision has been made yet. There is no deadline per se.”

CNBC-TV18, citing unnamed sources, said Amazon’s new bid was likely to be on a par with Walmart’s, but that Flipkart’s investors and founders continue to favour the deal with Walmart, with founder Sachin Bansal overseeing final negotiations.


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