A stake in Flipkart would pit Walmart against Amazon.com in India and local media have reported here that Amazon is exploring a rival offer for India's largest home-grown e-commerce player. Softbank now holds over 20% stake in Flipkart and this Walmart takeover will see them making $4 billion.
Bloomberg also reported that Major shareholder, Softbank will sell it's 20% stack in the company.
After Kalyan Krishnamurthy (CEO) and Binny Bansal (Group CEO), Flipkart's Executive Chairman Sachin Bansal is next on the line who may also exit the company in case of a successful completion of the deal with Walmart. Tech giant Google's parent company Alphabet Inc would also tag along with Walmart for an investment in Flipkart.
Flipkart's board ultimately decided a deal with Walmart is more likely to win regulatory approval because Amazon is the No. 2 e-commerce operator in India behind Flipkart and its primary competitor.
CEO Krishnamurthy is expected to continue in his role, but numerous reports have been pointing to the exit of one of the two founders, Sachin Bansal, who is now the executive chairman of the company. Flipkart did not respond to queries by TOI on the matter. Sachin and Binny Bansal found Flipkart in 2007 from an apartment in Bengaluru.
A spokesman for Walmart declined to comment.
Amazon and Flipkart are locked in an intense battle for leadership in the Indian market and have pumped in billions of dollars towards marketing and setting up infrastructure in the country.
Currently, SoftBank and Tiger Global own little more than 20 per cent each of Flipkart, Naspers holds almost 13 per cent stake, Accel 6.4 per cent, while the Bansals own just over 5 per cent each of the company. It is expected that the offer is a ploy to block Walmart from bringing its expertise in logistics and supply chain management to Flipkart. But this week, according to a report by CNBC affiliate CNBC-TV18, the deal appears to not be quite final; Amazon has tendered a competing offer-complete with a $2 billion "breakup fee" to cover the cost of a potentially scuttled deal.