Flipkart v/s the Walmart deal

Flipkart was founded in 2007 in Bengaluru by Sachin Bansal left and Binny Bansal

Flipkart was founded in 2007 in Bengaluru by Sachin Bansal left and Binny Bansal

Flipkart was founded in 2007 by former Amazon employees Sachin Bansal and Binny Bansal, who are not related. Walmart will buy close to around 70 % of the stake online. Walmart will buy the stake in the Singapore holding company, Flipkart Pvt Ltd, that, in turn, holds majority shares in the multiple companies that run various businesses of the e-commerce company Flipkart.com in India.

What's more in store for Flipkart?

Walmart is expected to get three board seats at Flipkart and will also have a say in the appointments of the group's finance, legal and compliance heads.

Flipkart and Accel Partners did not respond to email queries till the time of publishing this report, while Walmart did not offer any official comment.

Flipkart controls almost 40% of India's online retail market, showed estimates by researcher Forrester.

An investment bet in Flipkart, will make it the biggest weapon Walmart's arsenal against Amazon.

What's in store for both the online retailers?

On the deal front, there is nothing concrete yet, except for a story from Bloomberg that said an announcement was likely to be made on Wednesday.

Click here for enlarge
Click here for enlarge

If there is one foregone conclusion in India's unpredictable e-commerce.

McMillon is also likely to address Flipkart employees at a townhall meeting this week, the person said on the condition of anonymity.

A report by the Press Trust of India detailed the tax perspectives that the new merger may have to deal with.

Amazon India spokesperson has revealed, "As India's fastest growing ecommerce player with a long-term commitment to make ecommerce a habit for Indian customers, we continue to invest in the necessary technology and infrastructure to grow the entire ecosystem".

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. This according to experts would also depend on the country from where money has been routed, and the tax treaties that India has signed with those countries. But there was another angle besides the capital gains tax - that of carry-forwarding the losses against income tax payable to the company. According to reports, tax authorities have fixated their eyes on the deal which aims to disrupt the Indian e-commerce industry.

A deal with Walmart would also mark the first full exit for SoftBank's $100 billion Vision Fund, which is backed Saudi Arabia's Public Investment Fund, Apple and Qualcomm, among others.

The deal, likely to value Flipkart roughly at $18-20 billion, is likely to be the U.S. retail giant's biggest acquisition, news agency Reuters had reported earlier.

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