Walmart Stores Inc could buy up to a 51-per cent stake in Flipkart, making it the online retailer’s largest shareholder, according to a report The Economic Times reported citing sources.
Walmart could initially buy about 20-26 per cent stake and then increase its shareholding to 51 per cent in tranches, according the report.
The deal, estimated to be worth $10-12 billion, will involve purchase of shares from existing investors such as SoftBank Corp, Nasper and Tiger Global. The investment values Flipkart at about $20-22 billion (See: Walmart offers to sweeten valuation for large stake in Flipkart).
Japanese tech investor SoftBank Corp is one of the largest investors in the Bengaluru-based company.
Walmart could take a hands-on role in running the company if the current transaction goes through. It has already concluded the due diligence process, according to the report.
Walmart, Flipkart, and SoftBank declined to comment what they called speculation, the report said.
Initial media reports had suggested Walmart would buy a minority stake. But a Reuters report last month said Walmart is looking to buy more than 40 per cent in Flipkart.
Earlier reports said Walmart’s proposed investment in Flipkart will include setting up a chain of physical retail stores in India (See: Walmart-Flipkart deal may result in physical retail store chain).
A Mint report had also said any investment will likely make Walmart Flipkart’s biggest shareholder.
A deal with Walmart will help Flipkart compete with Amazon, which has been aggressively expanding its online and offline presence in India.