News: Post Walmart deal, Flipkart’s ESOPs valued at $2 billion

#MergersAndAcquisitions

Post Walmart deal, Flipkart’s ESOPs valued at $2 billion

ESOPs held by about 100 current and former employees of Flipkart are now estimated to be worth more than $1 million and Walmart will offer a 100 per cent buyback of these vested shares, as per report.
Post Walmart deal, Flipkart’s ESOPs valued at $2 billion

On 9th May 2018, the market witnessed the closure of one of the major acquisition deals as Walmart bought a majority stake of 77 percent in Flipkart. There have been a lot of developments since the news broke out, from Sachin Bansal quitting Flipkart to the latest news that about $500 million is being outlined towards liquidity of employee stocks.

Reports suggest that Walmart’s acquisition of Flipkart at a valuation of nearly $21billion has generated one of the largest pools of wealth for employees in India’s corporate history. The deal has lifted the total worth of Flipkart’s employee stock ownership plans, including unvested shares, to $2 billion (about Rs 13,455 crore) and the U.S based retailer is planning to offer a 100 per cent buyback of vested shares by Flipkart employees. 

Recently in December 2017, the Bengaluru based company had completed its fourth ESOP repurchase plan worth $100 million, the largest such buyback by a private company in the country. More than 3,000 employees of Flipkart and its fashion arms Myntra and Jabong, and its payments arm PhonePe had participated in that repurchase exercise. 

Employee wealth created by privately held homegrown companies in India’s digital ecosystem is around $4-5 billion, according to executive search firm Longhouse Consulting and out of that Flipkart alone accounts for over 20 percent. 

Earlier, today Walmart CEO Doug McMillon has stated that the Flipkart-Walmart deal will create around 10 million jobs in India over a period of few years. Walmart India said that it will create jobs by developing supply chains and commercial opportunities, along with its investment which will create new direct jobs.

While acquisition deals usually create a fear among employees and lead to massive layoffs, Walmart seems to be showering its employees with good news so far.

Topics: #MergersAndAcquisitions, Compensation & Benefits

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