FLIPKART AND WALMART
MERGER
INTRODUCTION TO WALMART
Walmart
American Company
Established on July 2nd 1962
Headquarters:Bentonville, Arkansas, U.S.
Founder : Sam Walton
Ceo: C , Doughlas Mcmillion
Worlds Largest Company
Sales of 2022 :$ 573 Billion
INTRODUCTION TO FLIPKART
Flipkart
Indian Company
Established on 5th September 2007
Headquarters: Bangalore India
Founder: Sachin Bansal,Binny Bansal
Ceo: Binny Bansal
Valuation $10 Billion
BENEFITS TO STAKEHOLDERS BY
ACQUISITION
The Walmart deal enthused everyone as it valued the company at nearly
$21 billion, a windfall for shareholders.
These are the present major stakeholders of FLIPKART
WALMART (72%)
TENCENT (5.3%)
TIGER GLOBAL (4.1%)
BINNY BHANSAL (2.4%)
CPPIB (2.2%)
SOFTBANK GROUP (1.4%)
QIA (1.3%)
MICROSOFT (1.2%)
ACCEL (1.1%)
OTHERS (9%)
BENEFITS TO STAKEHOLDERS BY ACQUISITION
New York-based investment firm Tiger Global Management, Flipkart’s
biggest backer since 2010, raked in $3.3 billion from its total investment
of $1 billion in India’s largest online retailer that Walmart has bought.
Binny's partial sale of stake brought him $104 million (Rs 700 core) while
his 2.4 per cent stake in the company is now valued at $504 million.
Japan’s Softbank expected returns of about $4 billion as part of the
Walmart-Flipkart transaction, fetching about 1.5 times its investment of
$2.5 billion in Flipkart just nine months ago.
ACCEL, The US venture capital firm took home $800 million to $1 billion
over three rounds of sale for over $100 million invested since 2009. It was
the first company in 2008 to invest in Flipkart which was still trying to
take off after an year of operation.
Naspers, the South African tech and media conglomerate, got $2.2 billion
for $600 million it invested over several rounds starting in 2012.
Benefits to amalgamated company
• The Flipkart-Walmart deal will benefit Flipkart to give leverage to Walmart
single-channel knowledge and expertise supply chains in the market.
• Both Walmart & Flipkart will be having different operating structures and
separate brands in the market.
• The aim of Walmart through this acquisition is to extend its B2B
(Business to Business) sales across India.
• This merger will bring two biggies (offline and online) under one umbrella
and both of them will help each other in their weak areas to tap the
complete Indian market.
• With the help of this deal, Flipkart can now re-furnish its system using the
expertise of Walmart in running offline stores, access to manufacturers
and sellers, supply chain and also a chance to enter into the grocery
sector.
Post Merger calculation
1. Walmart Inc-backed Flipkart is considering raising $2 billion to $3 billion at a
valuation of more than $40 billion to expand its product range in India and
challenge rivals, the Mint reported on Tuesday, citing two people with direct
knowledge of the matter.
2.
2. Walmart, the world’s largest retailer, has led a $1.2-billion investment in
Flipkart, valuing the e-commerce firm at $24.9 billion.
3.when Walmart invested $16 billion for a majority stake in Flipkart, the
Bengaluru-based firm was valued at less than $21 billion. With the latest
investment, Flipkart has widened the gap with the second-most valued start-up
in India, Paytm, pegged at $16 billion. The distant third and fourth in the pecking
order are Byju’s at $10.5 billion and Oyo at $10 billion.
4.Globally Walmart’s revenue touched $152.8 billion, up 9.8 per cent in constant
currency. The company also raised its Q4 outlook. The company also said that
customers are focusing on value buys.
Walmart and Flipkart which
type of merger was done ?
● It was a Reverse Merger/Reverse acquisition / Reverse takeover—allows a private company
to go public while avoiding the high costs and lengthy ...
● Now let's learn what is a reverse merger?
● 1) It is a merger where a private company becomes public my acquiring other company. It
allows a private company to go public while avoiding the high costs and lengthy lawful
procedures
● 2) Benifits of reverse merger are : lesser cost -- private company can easily get converted
into public company at a very low cost . And it can also get listed on stock exchange without
ipo.
● 3) Hindrance/ drawback: The burdens of many lawful rules and regulations. Reverse merger
also leads to reverse stock splits. Which eventually effects on the number of share
stakeholders hold in the merger company
● 4) From this merger Flipkart will shed its startup tag and become part of a global giant. It
will give major boost to the business of Flipkart in India.
● 5) In India, there are many companies going public now there are many huge mergers
happening and companies are surving more better than they were .
