Amazon is also offering a breakup fee of $2 billion to underline its interest in this game of business deal
The Hush Post: Just as Flipkart-Walmart ‘business marriage’ looked like in its last leg, rivals Amazon is aggressively proposing to Flipkart. The global e-commerce giant has made an offer to Flipkart to buy a 60 per cent stake.
The deal offered by the Jeff Bezos-run company seeks to merge Flipkart with its Indian arm and also wants a non-compete agreement with founders of Flipkart for two years.
The financial nitty-gritties of the new deal are generally going to be similar to that of the Walmart proposal.
Amazon is also offering a breakup fee of $2 billion to underline its interest in this game of business deal.
However, regulatory hassles may put a stop to Amazon’s plans. Any Flipkart-Amazon deal is likely to come under lens of the competition watchdog given the dominant market share these two entities have accumulated in the e-commerce space. So Flipkart’s investors will think twice about such an offer.
As per the report, Flipkart co-founders as well as investors, including Tiger Global, are favouring the deal with Walmart.
Why everybody wants a marriage with Flipkart ?
Despite losses, Flipkart is considered one of the most successful Indian startup companies. Holding a controlling stake in the company can ensure a win-win situation in the Indian retail market.
Flipkart is the third most financed private company.
Founded in 2008 by IIT-Delhi alumni Sachin Basal and Binny Bansal, Flipkart is the most valued Indian internet business.
Why Flipkart matters for Walmart?
Walmart on the other hand did enter India over a decade ago. But its presence has been limited to just around 20 business-to-business stores owing to the restrictive policies of the government.
And why Flipkart matters to Amazon?
The two companies have been rivals and have been fightinf for supremacy for the the last five years. Yet, they are running a close race. While Flipkart outclasses Amazon on some parameters, Indian shoppers trust Flipkart slightly more than Amazon, shopping is considered to be cheaper and better at Amazon.