Walmart's urgency to stem market share losses to rivals like Aldi or Amazon has also seen it launch talks to merge its United Kingdom arm ASDA with J Sainsbury, in which it will hold a minority stake. "Walmart and Flipkart are agreeing on the deal terms, for now".
Though not much in the way of details are known about the Amazon offer, the report states that Amazon's bid is likely on par with that of Walmart, and that the global e-commerce giant intends to sign a non-compete agreement with Flipkart. The Walmart-Flipkart deal would be Form 1 and an Amazon-Flipkart deal Form 2, said legal experts. The company did not immediately respond to AFP's request for comment. Take Amazon Prime: It offers Indian customers two-day delivery, the ability to stream video and music and other perks for $15.
It is likely to involve giving cash exits to some existing Flipkart investors as well, a source close to the matter said. A spokesman for Walmart declined to comment, while Amazon said it does not offer comments on rumours and speculation. Analysts have however forecast that the deal is a business strategy adopted by both the renowned eCommerce giants for not only gaining control over Flipkart but also to establish their presence across the India eCommerce sector.
Walmart's will potentially be bidding to acquire more than 51% stake in Flipkart by investing up to $8-10 billion.More news: It's Sidda-rupaiah in Karnataka: PM Modi
Talks of Amazon making a counterbid to pick up stake in Flipkart have been doing the rounds for a while now.
With India seen as the next bastion of growth for e-commerce Amazon and Walmart have been picking up their efforts in the country.
India's e-commerce industry is expected to reach US$200bn by 2026, up from $38.5bn past year, according to the India Brand Equity Foundation, which was founded by the Indian government.
The acquisition of Flipkart by Walmart will be an extension of its domestic battle with arch rival Amazon, whose expansion is the biggest threat to the retail icon.
In an interview with Reuters on Tuesday, McKenna downplayed analyst criticism that the company has been slow to move in India.