Google’s parent Alphabet Inc and Walmart Inc has sealed the deal with Flipkart at roughly $18-20 billion as they are set to acquire the Bengaluru based company. As per the contract, Walmart is likely to own a roughly 60 to 70 percent stake, while Alphabet will get about 15 percent ownership of Flipkart. Reports suggest that the Walmart-Flipkart deal was closed on Tuesday night (Japan Time).
"Last night, (they) reached a final agreement and it was decided that Flipkart will be sold to America's Walmart," said SoftBank CEO Masayoshi Son.
SoftBank owns a 20 percent stake in Flipkart. And Masayoshi Son shared that SoftBank's $2.5 billion stake in the company currently would be worth $4 billion with the acquisition.
Flipkart was founded in 2007 by former Amazon employees Sachin Bansal and Binny Bansal. Initially, they had spent $6,100 only for making the website to set up the business and later raised funding $1 million from venture capital funds Accel India in 2009. In August 2012, it had announced the completion of its 4th round of $150 million funding from MIH (part of Naspers Group) and ICONIQ Capital. By August 2015, after raising US$700 million, Flipkart had already raised a total of $3 billion, over 12 rounds and 16 investors.
The latest deal that Flipkart made before Walmart was with Softbank Vision which invested $2.5 billion in Flipkart.
The deal which is said to be one of the largest acquisition deals for the US-based retailer will surely lead to a lot of changes in leadership. Earlier it was reported that in the event of the Flipkart-Walmart deal, the latter will retain Kalyan Krishnamurthy as CEO and may give Sachin Bansal a higher role in the firm. Also, the American retailer is planning retention strategy for key executives at Flipkart as well as senior leaders at Myntra-Jabong and PhonePe.
The list of executives includes Myntra CEO Ananth Narayanan and PhonePe co-founders Sameer Nigam and Rahul Chari. As retaining the talent is one of the top challenges at the time of acquisition, the company might pay compensation to some key executives for over several years to assure they stay with the company after the deal.