August 21, 2018
Walmart just gained more firepower in its fight against Amazon.
The discounter has completed its $16 billion investment in Flipkart, making Walmart the largest shareholder in the company with a 77% share. Flipkart is the largest e-commerce player in India, where online sales are expected to exceed $73 billion by 2022. It is touted as a direct competitor to Amazon, which considers India one of its key global markets. The online giant was also reportedly looking to acquire the Indian company.
Walmart’s investment includes $2 billion of new equity funding to help accelerate the growth of the Flipkart business. Both companies will retain their own brands and operating structures in India. Moving forward, Flipkart’s financials will be reported as part of Walmart’s International business segment.
Founded in 2007, Flipkart has led India’s e-commerce revolution. Flipkart’s supply chain arm, eKart, serves more than 800 cities, making 500,000 deliveries daily.
“Walmart and Flipkart will achieve more together than each of us could accomplish separately to contribute to the economic growth of India, creating a strong local business powered by Walmart,” said Judith McKenna, president and CEO of Walmart International. “Our investment will benefit India by providing quality, affordable goods for customers, while creating new skilled jobs and opportunities for suppliers. As a company, we are transforming globally to make life even easier for customers, and we are delighted to learn from, contribute to and work with Flipkart to grow in India, one of the fastest-growing and most attractive retail markets in world.”
Walmart first announced it would acquire Flipkart in May. It estimated the deal would have a negative impact of $0.25-$0.30 on earnings per share (EPS) for fiscal 2019.
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