Walmart May Acquire Flipkart Stakes For $10-12 Bn

US retail giant Walmart has completed a thorough due diligence process on e-commerce firm Flipkart this week, as the retailer looks to take a controlling stake of 51 percent or more in the Indian company.

Walmart has already floated a shareholder agreement, or offer a proposal, and is looking to shell out about $10 billion to $12 billion for the stake that would value Flipkart at roughly $20 billion, however, the deal stays incomplete, one of the sources familiar with the matter said.

A stake in Flipkart would pit Walmart against Amazon.com in India and local media have reported that Amazon is exploring a rival offer for India’s largest home-grown e-commerce player.

Walmart is now seeking a bigger stake than previously expected. The reports had come about Walmart thinking of buying over 40 percent in Flipkart, which is backed by the likes of SoftBank Group, Tiger Global, eBay, Accel Partners, Naspers, Tencent Holdings and Microsoft Corp.

Bengaluru-based Flipkart, started by two former Amazon employees, is fighting Amazon to grab a bigger piece of India’s massive online retail market which, according to Morgan Stanley, could be worth $200 billion in a decade.

Walmart’s investment would give Flipkart not just additional funds to fight Amazon, but also arm it with a formidable ally with extensive experience in retailing, logistics and supply chain management.

A person familiar with the matter said that the probability of a Flipkart-Amazon deal was low and that such a deal may spark competition fears as Flipkart and Amazon dominate India’s e-commerce market.