SoftBank confirms it's selling 22% in Flipkart to Walmart

Ending all the suspense about the selling of Softbank’s stake in Flipkart, Japan’s SoftBank has confirmed to sell entire 22% stake in Flipkart to Walmart. Almost a year ago, SoftBank’ had invested $2.5-billion in Flipkart through the Vision Fund. When entirely sold, the deal would buy its stake for $4 billion.

 

A Spokesperson for Softbank said, “SoftBank confirms the sale of its entire stake in Flipkart to Walmart.” The person did not elaborate on the date by which the transaction is expected to be formalised.

 

A financial daily had reported that SoftBank had taken a call to sell its shares two weeks after the Walmart-Flipkart deal announcement. While SoftBank hasn’t specified any reasons for delaying its decision, the tax implication attached to the share sale has emerged as a big hindrance for the group. SoftBank’s stake sale to Walmart would entail short-term capital gains tax if the transaction takes place within 24 months of purchase of shares.

 

Masayoshi Son, the Founder and CEO of SoftBank were in discussions with Walmart even after this biggest e-commerce deal. The US retail giant Walmart picked up a 77% stake in Flipkart, including SoftBank’s stake in the Bengaluru Company, valuing it at around $21 billion.

 

SoftBank’s Son had been expressing unwittingly its exit from the Flipkart until the deal had completed.

 

The Fund’s move to exit Flipkart in just less than a year of it investing in the web retailer leaves it with only a solo bet on Paytm Mall.

 

Before Flipkart, SoftBank in 2014 had invested in Snapdeal, which ended with the group writing off almost $1 billion invested in the Delhi-based online marketplace.