Walmart is in talks to buy a stake of more than 40 percent in Indian e-commerce firm Flipkart, a direct challenge to Amazon in Asia’s third-largest economy, two sources familiar with the matter said on Friday.
In what would be one of its biggest overseas deals, the US retailer is looking at buying new and existing shares in Flipkart and due diligence is likely to begin as early as next week, the sources said. They declined to be named as the talks were private.
Terms under discussion were not immediately available, but Flipkart would be valued at more than the $12 billion figure given when Japan’s SoftBank Group’s Vision Fund took roughly a fifth of the firm last year for $2.5 billion, they added.
A spokesman for Flipkart said the company does not comment on rumors or speculation. An India-based representative for Walmart declined to comment.
A deal with Walmart would give Flipkart much-needed muscle in its fight against Amazon, which has committed to investing $5 billion in India as it expands aggressively, including into online grocery deliveries, which analysts tip as the next big battleground for the country’s e-commerce sector.
Besides its own e-commerce site, Flipkart owns fashion portals Myntra and Jabong, and controls nearly 40 percent of India’s online retail, ahead of Amazon, according to estimates by research firm Forrester. It is also looking into expanding into grocery deliveries.
“Walmart’s expertise in selling groceries and low-cost apparel could help Flipkart remain ahead in India’s e-commerce market,” said Satish Meena, senior analyst at Forrester.
Former Amazon employees Sachin Bansal and Binny Bansal founded Flipkart in 2007 in India’s tech hub of Bengaluru.