India Digest: Flipkart, Allied Blenders, Bharti Telemedia in talks to sell stake

A customer pushes a shopping cart at a Walmart store in Chicago, Illinois, U.S. November 23, 2016. REUTERS/Kamil Krzaczynski

US retail major Walmart is in talks to pick up a majority stake in Flipkart, while Beam Suntory plans to acquire a stake in Allied Blenders. Also, Bharti Airtel is likely to pare more stake in its DTH arm.

Walmart in talks to pick up majority stake in Flipkart

To take on its American peer Amazon in India, retail major Walmart Stores Inc is in discussions to acquire a majority stake in domestic e-commerce giant Flipkart, according to a report in The Economic Times citing sources.

As per the sources cited in the report, Walmart could initially acquire 20-26 per cent stake and gradually increase its shareholding to 51 per cent in tranches. It could shell out up to $10-12 billion for the entire stake purchase.

Japanese investment giant SoftBank, along with some other investors, may pare their stake in Flipkart if the Walmart deal goes through.

Walmart could take a hands-on role in running the company, if the current transaction fructifies, said another source quoted in the report.

The primary investment, which is likely to be between $1-2 billion will value the Bengaluru-based company at about $20-22 billion, almost double the $10.2-billion valuation it had in April 2017 before it raised funds in a round led by Chinese internet giant Tencent.

Beam Suntory to acquire stake in Allied Blenders

Alcohol manufacturer Beam Suntory, which owns brands like Jim Beam, Laphroaig and Yamazaki, is in preliminary talks to pick up a stake in Kishore Chhabria-controlled Allied Blenders and Distillers (ABD), said a Times of India report .

According to the sources cited in the report, Beam Suntory is in talks for a minority investment deal and a commercial partnership with ABD, which will give it the latter’s distribution of its portfolio and bottling rights for a few select brands.

“Both sides have had a few rounds of meetings, including one in Mumbai last week. These discussions are still in early stages,” said one of the sources.

Beam Suntory is a subsidiary of Japanese food and beverage conglomerate Suntory Holdings.

Bharti Airtel looks to sell more stake in its DTH arm

Leading telecom player Bharti Airtel is reportedly looking to pare more stake in its DTH arm Bharti Telemedia to raise more funds to take on its fiercest rival Reliance Jio.

According to a report in The Economic Times quoting sources, a precursor to such a move was the recent Bharti board approval to transfer 19 per cent stake in Bharti Telemedia to its wholly-owned unit Nettle Infrastructure Investments.

“A part of the aforesaid stake shall be utilized for completion of stake sale of Telemedia to Warburg Pincus Group, as earlier announced by the Company vide its press release dated December 12, 2017,” Bharti said in its stock exchange filing.

This transfer will be in addition to a 25 per cent block already transferred in January 2018, thus taking the total block being transferred to 44 per cent.

As per the news report, part of the balance stake will be used for further sale to raise funds. However, Airtel would continue to own a majority stake in the DTH arm.

Also Read:

Walmart keen on buying India’s Flipkart but SoftBank opposed to sale

India: SoftBank Vision Fund invests around $2.5b in Flipkart in record tech investment

India: Warburg Pincus to buy 20% stake in Airtel’s DTH unit for $350m