BUSINESS
04/05/2018 12:25 PM IST | Updated 09/05/2018 4:04 PM IST

Update: SoftBank CEO Confirms US Retail Giant Walmart Is Buying Majority Stakes In Flipkart

The deal may prompt co-founder Sachin Bansal to exit the company, say reports.

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Update: Softbank CEO Masayoshi Son has now confirmed that Walmart is buying controlling stakes of India e-commerce company Flipkart.

Economic Times quoted Masayoshi Son saying, "Last night, (they) reached a final agreement and it was decided that Flipkart will be sold to America's Walmart."

Reports suggest that Softbank, that owned 20% stake in Flipkart, will sell all of it to Walmart.

In a huge merger, US retail giant Walmart Inc has signed a deal to acquire 73% of controlling stakes of Indian e-retail company Flipkart -- a deal that will likely prompt the exit of Flipkart's co-founder Sachin Bansal -- said reports last Thursday.

Factor Daily reported sources as saying that Walmart, that had put Flipkart's value at at least $22 billion, will be spending at least $14.6 billion in the acquisition.

The factor daily report quoted sources a saying, "Cash component will be close to 55%, which will mark the exit of some of the largest investors in Flipkart."

While the deal has not been formally announced, another report indicating the merger said that Flipkart had bought bought back $350 million worth of shares from its investors ahead of the deal with

Reuters quoted a lawyer as saying, "Typically strategic investors don't like to deal with multiple shareholders because it just becomes more cumbersome. So they very often ask companies to clean up the cap table or consolidate small shareholders."

While CEO of Flipkart Kalyan Krishnamurthy will reportedly continue in his position, reports also said that co-founder Sachin Bansal may quit.

Economic Times reported sources as saying there have been talks of Bansal leaving for the last couple of says and a decision will come through.

The newspaper report that Walmart wants Group CEO Binny Bansal and Krishnamurthy to have more crucial rules in the company.

These developments came close on the heels of Amazon making a formal offer to buy 60% of Flipkart, in competition with Walmart's bid to get majority ownership of the company.

Amazon is Flipkart's major rival in the Indian e-commerce market. With Walmart buying Flipkart, Amazon will be in competition now with Walmart in India. The companies are each other's rivals in the US as well.

Editor's Note: This article has been modified to reflect the latest update on Walmart buying majority share in Flipkart. It was first published on Thursday, May 4, 2018.