Walmart-Flipkart Seal the Deal: What You Need to KnowWalmart has acquired 77 per cent controlling stake in Flipkart for $16 billion

After months of speculation, the kart has finally entered the mart. Walmart has acquired 77 per cent controlling stake in Flipkart for $16 billion, making this the biggest ecommerce deal in the world. Flipkart, which changed the game for Indian e commerce, had risen steadily over the past 11 years pitting itself against global competitors like Amazon.

With Walmart's acquisition, the ecommerce industry in India is set to get even more exciting. With Alibaba's wish to capture the Indian market and Amazon's heavy presence in the country, Walmart will now be able to finally find a good place in a market that has embraced e commerce wholeheartedly.

Entrepreneur Indiatakes a look at the highlights of the Walmart-Flipkart deal

Walmart Takes Over Flipkart

The talks between Walmart and Flipkart authorities had started in late 2016, with the global giant looking for a minority stake in the Indian e-retail, according to reports. Over the following months, the deal progressed. Until recently, reports suggested that Walmart could take up about 55 per cent in the company while competitor Amazon too reportedly bid for 60 per cent.

However, the company put all rumours to rest on Wednesday evening as it declared that it's taking up 77 per cent of the company for $16 billion, at a valuation of $20 billion. The rest of the business will stay with its earlier investors Tiger Global Management LLC, China's Tencent Holdings Ltd, Microsoft Corp and Flipkart co-founder Binny Bansal.

Sachin Bansal Bids Goodbye

Flipkart's journey is one of the most remarkable ones in the Indian startup ecosystem. Two Amazon employees Sachin Bansal and Binny Bansal rented out a 2BHK, to start their own little e-commerce company, which earlier was slated to sell USBs and drives and then evolved to be an online bookstore. Flipkart's tweet from 2009 said, "Hi earthlings, I am Flipkart.com. I am a website, I speak English and I know a lot about Books that you all read."

But soon Sachin Bansal and Binny Bansal took over the Indian marketplace. The duo who built the company from scratch brought it up to be one of the highly valued companies in the country. But the Walmart acquisition also sees co-founder Sachin Bansal's exit. Both the Bansals (not related) are set to gain $1 billion from the deal.

Walmart Adds Fresh Equity Funding

While issuing the statement, Walmart has said that it will use newly issued debt & cash to finance the investment. The global giant is also pumping in $2 billion of fresh equity funding to grow Flipkart's business in the country. CEO of Walmart Doug Mcmillon said in a statement that India is one of the most attractive retail markets in the world and their investment in Flipkart is because of the company's leading role in transforming the Indian e-marketplace. Walmart is also eager to take forward Flipkart's dream of being a publicly listed company.

According to reports, Walmart is also looking at Flipkart's earlier acquisitions like Phonepe to expand their businesses.

Softbank Exits With $4 Billion

While everyone awaited the news of the deal, SoftBank CEO Masayoshi Son accidently let the cat out of the bag. During an earnings webcast, Son confirmed the Walmart-Flipkart deal even before it was confirmed by the companies themselves.

Softbank which had earlier pumped in $2.5 billion into Flipkart, exits the company by selling its 20 per cent stake for $4 billion.