Walmart is buying a majority stake in Flipkart, the top online retailer in India, further escalating its battle with Amazon to the global stage.
Walmart is paying $16 billion for a 77 percent stake in Flipkart, the company announced Wednesday, with the remainder controlled by existing investors such as Tencent, Microsoft, co-founder Binny Bansal and Tiger Global. The deal is a mix of $2 billion in new equity and Walmart buying out other shareholders. Long-term, Walmart aims to support Flipkart’s transition to a publicly listed subsidiary.
The deal gives Walmart an even bigger presence India, where it currently has 21 stores in 19 cities. The nation of 1.3 billion people has become a battleground in the global quest for online retail dominance, with Amazon also planting its flag there.
“India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of eCommerce in the market,” Doug McMillon, Walmart president and CEO said in a statement.
Amazon has predicted that India will be the company’s top market outside the U.S. within a decade. Amazon has committed to spend at least $5 billion in India, including bringing its Prime fast-shipping program there and creating original movies and TV shows.
Flipkart boasts more than 100 million users, 100,000 sellers and 80 million items on its platform. The 11-year-old company reported $4.6 billion in net sales last year, according to Walmart, a rise of 50 percent over the previous year.