Days after receiving the green light from the Competition Commission of India (CCI), US-based Walmart said it had completed its $16-billion acquisition of India’s largest e-commerce firm Flipkart.
In a statement, Walmart said Flipkart’s existing management team led by CEO Kalyan Krishnamurthy will continue to lead the business. Existing investors Tencent Holdings Ltd and Tiger Global Management will remain represented on the Flipkart board, Walmart said.
In addition to Flipkart’s independent board members, the US-based retailer will appoint new board members from Walmart, the company added.
Earlier, the CCI approved the Flipkart-Walmart deal, despite protests from traders across the country over fears that the deal would drive several small retailers out of business. Interestingly, CCI said Flipkart’s discounting practices might need to be dealt with separately, an issue that assumes significance in the wake of the new draft policy that proposes further restrictions on discounting by online marketplaces. India already bans discounting by online marketplaces.
“Walmart and Flipkart will achieve more together than each of us could accomplish separately to contribute to the economic growth of India, creating a strong local business powered by Walmart,” said Judith McKenna, president and CEO, Walmart International. “Our investment will benefit India by providing quality, affordable goods for customers, while creating new skilled jobs and opportunities for suppliers. As a company, we are transforming globally to make life even easier for customers, and we are delighted to learn from, contribute to and work with Flipkart to grow in India, one of the fastest-growing and most attractive retail markets in world.”
In May, Walmart said it would acquire 77% of Flipkart for $16 billion, valuing India’s most valuable consumer internet start-up at $21 billion.
“We are poised and ready to deliver the full value of this partnership for India,” said Binny Bansal, Flipkart’s co-founder and group CEO. “By combining Walmart’s omni-channel retail expertise, supply-chain knowledge and financial strength with Flipkart’s talent, technology and local insights, we are confident that together we can drive the next wave of retail in India.”
The buyout, which is Walmart’s biggest acquisition and the biggest e-commerce deal globally, marked the end of an era for Flipkart as co-founder and chairman Sachin Bansal left the company, selling his 5.5-6% stake for roughly $1 billion. Flipkart’s other founder, Binny Bansal, continues as Flipkart group chief executive officer (CEO) and Kalyan Krishnamurthy has retained his position as Flipkart CEO.
The competition will now intensify between Walmart-Flipkart and Amazon in the Indian market.