Walmart may find a stiff competitor in Amazon for its Flipkart deal which has reached the final lap of negotiations. Amazon has made an official offer of buying a 60% stake in the Indian e-retailer, the terms being on par with those made by Walmart earlier.
Amazon’s bid necessitates Flipkart who will get $2 billion as a breakup fee, from entering into a non-compete agreement. Walmart’s bid on the other hand includes an 80% acquisition of the stake in Flipkart. The proposal further disclosed no change in the existing structure of Flipkart. This will ensure that Flipkart’s management team stays on in the merger with the CEO position continuing to be held by the existing Kalyan Krishnamurthy. Walmart will be represented on Flipkart’s board by nominees, whose figure will range between three or four. Billionaire Jeff Bezos’ company Amazon, has however, refrained from making any comments as it does not want to fuel further speculation and stories. Further details about Amazon’s bid were unavailable.
The hype surrounding the deal between Flipkart and Walmart that amounts to a total of $12 billion just became more pronounced after news that Softbank had approached the global CEO of Walmart became public. Sources say that Flipkart has got a go ahead signal to the deal from its founders and investors. Flipkart’s founder, Sachin Bhansal had been to the U.S. the week earlier to supervise the negotiations which are in the final stages with Walmart. It is expected that the global team from Walmart will visit India soon for putting the final closing stamp on the deal with Flipkart.
However, it will have to be seen whether Amazon’s entering the fray is on account of a genuine interest in the deal or is it just a strategy to prevent the Walmart deal from going through. The next few days are going to seal the fate for the Indian e-commerce giant!