Competition Commission of India approves proposed acquisition of Flipkart Private Limited by Wal-Mart International Holdings, Inc. Walmart had announced in May that it plans to acquire 77% of Flipkart for $16 billion. Walmart had sought the approval for the deal on 19 May, days after it announced the proposed buyout of Flipkart.
The deal had faced opposition from traders bodies nationwide as well as the Swadeshi Jagran Manchin recent months. The Confederation of All India Traders (CAIT) has said it will move the court against CCI’s approval of the deal.
Mint reported on 3 July that traders and shopkeepers had decided to oppose the Flipkart-Walmart deal at every step, and even move the Supreme Court if required to defend their interests.
At the time, Praveen Khandelwal, secretary-general of CAIT, had said the traders’ body had sought an appointment with the commerce minister to discuss the matter. “We were expecting the government to reject this deal, but so far, we haven’t heard from them… We will fight this deal tooth and nail, and, if necessary, take this matter to the Supreme Court,” Khandelwal told Mint in July.
The transaction will result in the largest exit for private equity and venture capital investors in India — they’re expected to collectively make about $14 billion by selling shares to Walmart. The transaction puts it ahead of the $14.6-billion Bharti-Indus Towers merger and the $12.9-billion Essar Oil-Rosneft transaction. Only the Vodafone-Idea merger was valued higher at $23 billion. Flipkart cofounder Sachin Bansal exits while the other cofounder Binny Bansal remains invested.
The early US market response didn’t seem too positive with Walmart dropping 4% as it lost $10 billion in market capitalisation to $242 billion. Amazon was up marginally by 0.3%, putting its market capitalisation at $779 billion. Walmart plans to use Flipkart’s expertise to expand globally and assured employees that its startup ethos will be nurtured and strengthened. “We hope we learn from you how to build an ecosystem, more about innovation and payments — we will help with sourcing, supply chain expertise,” Walmart chief executive Doug McMillon told Flipkart employees.
