TOKYO, Japan - In a move that puts an end to weeks of uncertainty, Japan’s SoftBank agreed to sell its entire 21 percent stake in Flipkart to U.S.-based retail giant Walmart.
Uncertainty was high after SoftBank said it was still to decide whether or not to sell its stake.
After failing to orchestrate a merger with Snapdeal, the holding company's Vision Fund acquired the stake in Flipkart in August 2017 for around $2.5 billion.
The Japanese company led by Masayoshi Son had been in talks to retain its stake in Flipkart, and had also considered delaying the sale due to tax issues pertaining to short-term capital gains and Vision Fund’s registration in Jersey.
However, the decision by SoftBank comes days after reports emerged that Google-owner Alphabet is yet to make a decision on acquiring a minority stake in Flipkart and was waiting to see SoftBank’s move.
On May 13, Walmart acquired 77 percent holding in Flipkart Group for $16 billion, while Flipkart co-founder Binny Bansal and other existing shareholders, Tencent Holdings, Tiger Global Management and Microsoft will hold the remainder stake.
It was Walmart’s biggest deal ever and was aimed at giving it greater access to India’s eCommerce market.
Now, reports state that Walmart has also approached fair trade regulator Competition Commission of India (CCI) for approval of its proposed acquisition of a majority stake in eCommerce major Flipkart, saying the deal does not raise any competition concerns.
Walmart reportedly told the regulator that the proposed acquisition would be done through its subsidiary Wal-Mart International Holdings and that Flipkart is a Singapore-based investment holding firm, which along with its direct and indirect subsidiaries, both in India and elsewhere, is primarily engaged in the business of wholesale cash and carry of goods and providing marketplace-based e-commerce platforms to facilitate trade between customers and sellers in India.