SoftBank confirms selling ‘entire stake’ in Flipkart to Walmart
Japan’s SoftBank has decided to sell its over 20 % stake in e-commerce major Flipkart to US retailer Walmart for an estimated $ 4 billion. “SoftBank confirms the sale of its entire stake in Flipkart to Walmart,” a SoftBank spokesperson said.
The company is estimated to rake in about $ 4 billion from the sale. The move by SoftBank ends nearly two weeks of suspense over whether the Japanese telecom and Internet powerhouse would exit or stay invested in Flipkart post the deal with Walmart.
Walmart had, on May 9, announced that it will pay about $16 billion to buy about 77 % stake in Flipkart. While significant shareholders in the Bengaluru-based company d eBay had agreed to sell their shares, SoftBank had not taken a final call.
A statement issued by Walmart on May 9 had identified Flipkart co-founder Binny Bansal, Tencent Holdings Ltd, Tiger Global Management LLC and Microsoft Corp as those who would continue to be investors in Flipkart.
However, SoftBank took more time to arrive at its decision taking into account several factors including the tax that it would have to pay on profits it would earn from such share sale. SoftBank had invested $ 2.5 billion in Flipkart last year.
On May 9, hours before Walmart was scheduled to announce the Flipkart acquisition, SoftBank chief executive Masayoshi Son told during an investor call on his company’s earnings that Walmart had agreed to buy a controlling stake in the Indian e-commerce company.
He had gone on to state that the $ 2.5 billion investment made by the Japanese company through its Vision Fund into Flipkart was worth about $ 4 billion in the latest deal.
While SoftBank is now exiting Flipkart, it continues to be a significant investor in Flipkart’s rival Paytm Mall. Reports suggest after the closure of the Flipkart deal, SoftBank could look at pumping in funds into Paytm Mall.
–NEW DELHI, MAY 23, 2018