Walmart strikes deal to buy a majority stake in India’s Flipkart

Finance


Were the transaction to end in the second quarter of the fiscal year, Walmart said it would expect a hit to full year 2019 earnings per share (EPS) of roughly 25 cents to 30 cents.

The company reported an earnings miss in February, signaling the competitive challenges it faces from the likes of Amazon in online retail.

Earlier on Wednesday, SoftBank CEO Masayoshi Son said Walmart had reached an agreement to take control of Flipkart.

SoftBank is currently one of the largest shareholders in Flipkart. According to some reports, the Japanese tech giant is set to sell its entire stake as part of the deal.

Flipkart has 100 million users signed up to its platform, according to the company’s website. India, which has a population of 1.3 billion, is seeing rapid growth in its digital economy with the emergence of e-commerce start-ups like Snapdeal and Paytm.

The investment will see Walmart take on U.S. e-commerce firm Amazon in a key growth market for the company. In 2016, Amazon CEO Jeff Bezos announced that his company would invest $3 billion in India. Amazon reportedly made its own bid for a majority stake in Flipkart.

Walmart’s deal with Flipkart marks the retailer’s latest move to up its international presence. in late April, Walmart’s U.K. supermarket brand Asda merged with rival Sainsbury’s, a tie-up that presented a significant competitive challenge to Britain’s dominant grocer Tesco.

Shares of Walmart were down 3.5 percent in U.S. premarket trade on Wednesday following the announcement.



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