Walmart enters fray to buy Indian Flipkart for $15bn
Walmart is set to take on Amazon to buy a stake in India's biggest online retailer Flipkart, in a deal worth $15bn (£11.06bn).
Reports today say that the American retailer will buy three-quarters of Flipkart's shares at a valuation of just under $20bn.
Sources close to the deal told the Financial Times that Walmart boss Doug McMillon will head to India this week to announce the takeover.
The deal will mark the biggest foreign investment in India in the country's history, after a Russian consortium bought Essar Oil for $12.9bn back in 2016.
Walmart has been trying to break into the Indian market for more than a decade after enjoying a brief stint in the country when it entered a joint venture with Indian conglomerate Bharti in 2007.
It follows a separate announcement for Walmart at the end of April, as it was revealed that it was merging its British subsidiary supermarket Asda with Sainsbury's in a mammoth £15bn deal.
Read more: City analysts react to game-changing Sainsburys-Asda merger
Walmart's offer will come as a blow for Amazon, which has been pushing to increase its presence in the Indian grocery sector.
In a letter to shareholders last month, Amazon chief executive Jeff Bezos described India as one of the fastest growing marketplaces for his business.
"Prime added more members in India in its first year than any previous geography in Amazon's history," he stated.
"Prime selection in India now includes more than 40m local products from third-party sellers, and Prime Video is investing in India original video content in a big way, including two recent premieres and over a dozen new shows in production."
Flipkart was created by Sachin and Binny Bansal in 2007, and enjoyed a meteoric rise rehashing the strategy used by Amazon, which both men worked for before founding their own company.
The company began selling books before branching out into electronics and other goods as Flipkart's operations grew.
It has fended off competition from the likes of Amazon, who entered the market in 2013 committing $5bn of its capital to its Indian operation, with help from the backing of its largest investor, American hedge fund Tiger Management.
Flipkart also has backing from of US groups Microsoft and eBay, as well as Chinese investment holding conglomerate Tencent.
Another investor, the Vision Fund, run by Japanese SoftBank which has put $2.5bn into Flipkart, will reportedly sell off its entire holding, while Tiger Global will sell off most of its holding while retaining a 5 per cent stake in the business. The Bansals themselves will keep a holding of approximately 10 per cent.
A separate source in the Financial Times added that Google parent company Alphabet was also looking to buy some of Flipkart's shares. They also claimed that Flipkart had plans to branch into online food and grocery sales as well as web retail.
Walmart declined City A.M's request for comment.
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