Mumbai, India, May 9 – US retail behemoth Walmart is expected to announce Wednesday that it is to buy a majority stake in India’s largest e-commerce company Flipkart for around $15 billion.
Walmart CEO Doug McMillon arrived in Bangalore, the Flipkart headquarters, to announce the deal which media reports said would see the American firm acquire around 70 percent of the Indian e-tailer.
Analysts say it would be the world’s biggest-ever e-commerce acquisition and pit Walmart head-to-head against rival Amazon in one of the world’s fastest growing markets.
The deal — which is expected to value Flipkart at around $20 billion — would deliver a blow to Amazon, which has been expanding aggressively since it entered the Indian market in 2013.
Last week, Flipkart’s board agreed to sell up to 75 percent of the company to a Walmart-led group, according to multiple media reports.
Google’s parent company Alphabet is also expected to purchase a small stake, possibly around 10 percent, reports said, citing unnamed sources familiar with the matter.
There has been months of speculation that Walmart was preparing to buy Flipkart but both have repeatedly declined to comment on the talks.
Flipkart is India’s largest e-commerce group on the basis of sales but has been fighting off a huge challenge from Amazon.
Amazon boss Jeff Bezos has committed more than $5 billion to grabbing a big slice of India’s e-commerce pie after failing to make inroads in China.
E-commerce sales in India hit $21 billion last year according to market research company Forrester, and are expected to soar as its population of 1.25 billion people make greater use of internet access.
Flipkart was founded in 2007 by former Amazon employees Sachin Bansal and Binny Bansal, who are not related.
Like Amazon, it started as an online bookstore. Flipkart now sells everything from mobile phones, televisions and juicers to running shoes, sofas and beauty products.
Amazon had reportedly tried to scupper Walmart’s deal with Flipkart by negotiating its own purchase of a majority stake.