In the Flipkart ecosystem, Walmart was also said to have been particularly interested in the Myntra and Jabong fashion-centric portals. Walmart has been trying to enter the fashion e-space that is brutally dominated by Amazon in the US, but not so much in India. Pic courtesy: Walmart
The world’ s largest e-commerce deal was an all-cash transaction, with Walmart purchasing new shares of Flipkart worth $ 2 billion and buying a stake worth $ 14 billion from the firm’ s existing investors. Within the first year of the closing of the deal, Walmart was said to be planning to pump in another $ 3 billion into Flipkart, founded in 2007 by former Amazon employees Sachin Bansal and Binny Bansal. The deal, which still needs regulatory approval, would have to close by March 9 next year failing which it could be terminated, as per the filing that Walmart made with the US Securities and Exchange Commission( SEC). In comparison with the Flipkart deal, Walmart had paid only $ 3 billion for e-commerce site Jet. com, which it had acquired two years ago.
The new board at Flipkart will have eight members, including five directors appointed by Walmart. Walmart founder Sam Walton’ s grandson, Steuart Walton, may join the board of directors. Other minority shareholders will get to nominate two directors, besides co-founder Binny Bansal who will continue as a board member. Other minority shareholders after the deal will include China’ s Tencent Holdings, US hedge fund Tiger Global Management and IT giant Microsoft Corp. Walmart may in the future appoint a sixth board member with the approval of the majority of the Flipkart directors. Walmart can also appoint or replace Flipkart’ s chief executive and other key executives of group companies in consultation with Bansal and the board of directors.
Walmart will have a veto right“ over specified decisions relating to Flipkart’ s
With the Flipkart acquisition, Walmart would want to bridge the physical-digital gap, and India would be the testing ground. Walmart had entered India in 2009 through a joint venture with Bharti Enterprises, and took full control in 2013. Pic courtesy: Walmart business and activities,” the SEC filing said, without sharing more details. Walmart will also have the say on the appointment or removal of top executives at Flipkart and its
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