Walmart Inc.'s potential acquisition of a large stake in Flipkart India Pvt. Ltd. could double the Indian e-commerce company's valuation to around US$20 billion, the Times of India reported Feb. 8 citing "people directly aware of the matter."
Walmart has been in advanced talks to acquire a "significant" stake in Flipkart. A person privy to the information told the Indian publication that Walmart's offer could be for up to 20% of the company and that the retailer would purchase shares from existing investors.
If a deal with Flipkart goes through, Walmart could spend anywhere between $5 billion to $10 billion, sources added.
New York's Tiger Global Management, which owns 20.5% in Flipkart, is reported to be willing to explore a cash out, while the online retailer's largest shareholder Japan's SoftBank Group Corp. is not expected to sell its recently acquired stake in the Indian e-commerce giant. Other large shareholders are China's Tencent Holdings Ltd. and its majority shareholder South Africa's Naspers Ltd.
Walmart has been motivated to acquire a significant stake in Flipkart in order to better compete with Amazon.com Inc.
