SoftBank sets to bag $4 Bn exit from Walmart-Flipkart deal

Walmart to Buy Majority Stake in Flipkart for More Than $12 Billion

Flipkart's early investors like New York-based Tiger Global, Accel and South African internet conglomerate Naspers are likely to sell their entire stakes in Flipkart to Walmart if a deal is reached.

Reportedly, Tiger Global Management will sell almost all its 20% stake in Flipkart, while Softbank will dispose of a majority of its 20%-plus position, giving Walmart ownership of 60% to 80% of Flipkart. Walmart would pay at least $12 billion for a majority interest in Flipkart and the deal could be inked within two weeks.

All the major investors in Flipkart Online Services Pvt are now on board with the Walmart purchase, after an earlier debate over whether to sell to Amazon.com Inc., said the people, asking not to be named because the matter is private.

Among the issues still to be resolved are whether Flipkart's founders will continue leading the business. It will be interesting to see how Flipkart will change under Walmart because the latter is the largest retailer in the world, but it's losing the ground to online retailers such as Amazon.

Walmart (WMT) may acquire a stake as high as 80% in Flipkart, giving it a leg up against rival Amazon (AMZN) in an emerging market of 1.3 billion people.

Flipkart, SoftBank did not immediately respond to requests for comment, while a representative for Walmart in India declined comment.

Flipkart's board recently met to discuss the competing proposals and decided Walmart could close a deal more easily.

A David and Goliath battle rages in India between Flipkart and Amazon, which are both hoping to dominate the Indian e-commerce market.

In the space of the last week, one major development came to light that all major stakeholders in Flipkart were on-board with the deal, and eager to sell their stakes to Walmart. Amazon founder Jeff Bezos has committed $5.5 billion to India and his country chief, Amit Agarwal, has made progress by adapting the site to local conditions.

Notably, the deal would likely to value Flipkart at about $20 billion. Tiger and SoftBank are now the startup's largest shareholders, followed by South Africa's Naspers Ltd. That rush online has led some analysts to predict big gains for online retail, with Morgan Stanley forecasting that 30 percent annual growth in GMV will take India's e-commerce market to $200 billion by 2026.

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