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Amazon offers to buy 60% stake in Flipkart... formally

Amazon offers to buy 60%  stake in Flipkart... formally
BENGALURU: Amazon.com Inc has made a formal offer to buy a 60 percent stake in Indian online retailer Flipkart, CNBC-TV18 reported on Wednesday, threatening to complicate Walmart Inc's bid to buy a majority stake in the Indian e-commerce player.
Sources said earlier this month that Walmart was likely to reach a deal to buy a majority stake in Flipkart, Amazon's biggest competitor in India, by the end of June for $10 billion to $12 billion.
The deal would be the U.S. retail giant's biggest acquisition of an online business and would kick off a battle with Amazon in an Indian e-commerce market that analysts forecast will be worth $200 billion a year within a decade.
CNBC-TV18 reported that Amazon had offered Flipkart a breakup fee of $2 billion to convince it to discuss an offer which analysts say would bring with it substantial antitrust challenges, as Flipkart and Amazon dominate the online shopping space in Asia's third-largest economy.
Two sources close to the matter, asking not to be named, confirmed to Reuters that Amazon was interested in buying Flipkart, but declined to give further details.
One of the sources said that Flipkart had vetoed an approach from Amazon for a 51 to 55 percent in the company two years ago, judging its offered price as far too low at the time.
"Now with Walmart in the mix things are different," the source said. "To the best of my knowledge no decision has been made yet. There is no deadline per se."
CNBC-TV18, citing unnamed sources, said Amazon's new bid was likely to be on a par with Walmart's, but that Flipkart's investors and founders continue to favor the deal with Walmart, with founder Sachin Bansal overseeing final negotiations.
A spokesman for Walmart declined to comment, while Amazon said it does not offer comments on rumors and speculation.
Flipkart did not immediately respond to an email seeking comment.
Walmart's urgency to stem market share losses to rivals like Aldi or Amazon has also seen it launch talks to merge its UK arm ASDA with J Sainsbury, in which it will hold a minority stake.
It also marks a shift in Walmart's traditional approach of building a business on its own.
Overall, sales from Walmart International, which runs about 6,300 stores globally, stood at $118 billion in the fiscal year ended 2018, down nearly 14 percent from $136.5 billion in 2014.
This was in large part due to adverse currency movements, which hurt the money repatriated from its foreign arms, but also because of a series of missteps in major markets.
Agencies

Agencies

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