Flipkart co-founder, chairman Sachin Bansal likely to quit after Walmart takeover

Flipkart co-founder, chairman Sachin Bansal likely to quit after Walmart takeover

Flipkart co-founder, chairman Sachin Bansal likely to quit after Walmart takeover

According to a Bloomberg report, SoftBank is going to sell over 20 per cent stake in Flipkart at a valuation of $20 billion.

As it is, right ahead of the blockbuster deal, Flipkart has bought back over 1.8 million shares worth more than $350 million from minority investors valuing the company at $17.69 billion as per information filed by Flipkart with Singapore's Accounting and Corporate Regulatory Authority.

One of the persons said possible scrutiny from the Competition Commission of India (CCI) as well as risks related to sharing competitive data as part of due diligence were some of the reasons for Flipkart investors and management favouring a deal with Walmart and not Amazon, even though the rival's bid was slightly higher.

Once the acquisition process is complete, Flipkart's Executive Chairman Sachin Bansal may hang up his boots after taking company to new heights in the past 10 years, reports suggest.

Irrespective of the final suitor, the Flipkart buy would be one of the largest deals in the Indian retail sector and by far, the biggest in the country's booming e-commerce market.

Alphabet Inc., Google's parent company may also be looking to invest in Flipkart. The pair together own 10% of Flipkart's shares so, if both reports are accurate, Sachin Bansal's stake is presumably rolled into the board-approved agreement.

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When contacted, a Flipkart spokesperson said, "There have been speculations for the last six months of Flipkart being in and out of negotiations with several parties".

However, citing resources, the report said that Binny Bansal might stay in the firm after the Walmart takeover.

The Amazon bid offers a breakup fee of $2 billion, while the Walmart offer includes the buyout of over 80% stake.

SoftBank declined to comment. Flipkart was last valued at about Dollars 12.5 billion when it raised USD 2.5 billion from Masayoshi Son's SoftBank a year ago. Soft-Bank and Tiger Global are the two largest investors in Flipkart; Naspers, Accel Partners, DST Global are among the other key shareholders.

Walmart is now seeking a bigger stake than previously expected. The interest of Amazon and Walmart in India could also be because the retailers have struggled to find footing in China, largely because of the presence of local e-commerce players like Alibaba.

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