Walmart Inc. has cleared a major hurdle in its $16 billion deal for Indian e-commerce startup Flipkart Online Services Pvt. Ltd.
The Competition Commission of India has approved Walmart's proposed 77% stake acquisition of Flipkart, the regulator announced Aug. 8. The commission said it found little overlap between the businesses of Walmart's limited existing Indian operations and Flipkart.
"The operations of Flipkart were relatively strong in mobile and electronics products, which constituted substantial majority of its business," the commission said. "However, operations of Walmart in the same products was insignificant. On the other hand, operations of Walmart were focused on groceries but Flipkart was not present in this segment."
While Walmart and Flipkart do overlap in "lifestyle" products such as skincare and hygiene, the combined value is "low and relatively insignificant," the regulator said.
In a statement emailed to S&P Global Market Intelligence, Walmart said its majority acquisition of Flipkart will position the company for long-term success in India.
"Our partnership with Flipkart is testament to our continued confidence in our ability to contribute to this market," the company said. "Flipkart is a prominent player in India with a strong, entrepreneurial leadership team that is a good cultural fit with Walmart."
Walmart announced its proposed majority stake acquisition of Flipkart on May 9. The retailer filed for regulatory approval from the Competition Commission on May 18. Walmart said at the time that the deal "does not give rise to competition concerns."