Amazon Inc may be purchasing Flipkart over.
Reuters has recently reported that Amazon Inc may soon make a rival offer to India-grown Flipkart, which is parallely in talks with Walmart for a tie-up. Amazon and Walmart are both US-based retail corporations, and are now jostling for dominance in the Indian market.
Amazon has long been rumored to be exploring negotiation with Flipkart, however according to a report by Mint last week, a deal with Walmart is more likely. Reportedly, Walmart will buy a majority stake in Flipkart through a mix of primary and secondary share purchases in a deal that could value the Flipkart at $21 billion.
Reuters too was told by a person familiar with the matter that the probability of a deal with Amazon was low, and that any such deal could spark monopoly concerns as Flipkart and Amazon dominate India’s e-commerce market.
Apparently, Walmart is negotiating to buy over 40 percent of Flipkart. And if the deal comes through, it would potentially be Walmart’s biggest overseas deals. Morgan Stanley estimates the deal to be worth $200 billion in a decade’s time.
And if this does go in favor of Walmart, this deal will consequently be a huge challenge to Amazon India, which has committed to invest $5 billion in India as it expands into online grocery delivery.