SoftBank’s CEO has stunned the whole world by announcing the big deal. He has announced the finalization of the deal between Flipkart and Walmart. Here, it is worth mentioning that Flipkart is an Indian e-commerce giant. Walmart is an American based world’s largest retail store. The deal shows that Walmart has bought 77% stake of Flipkart for $16 billion. This is the first ever big deal in the e-commerce world. This deal will increase the competition between Walmart and Amazon in the Indian e-commerce industry. Walmart has announced to bring administrative changes into the set up of this e-commerce giant. Also, the deal has put SoftBank in a tight position.
SoftBank is a Japanese bank that has about 23.6% stake in Flipkart. The experts are of the view that SoftBank will delay the deal to avoid short-term exit taxes. The bank has not decided to sell its stake to Walmart. Earlier, SoftBank was the largest stakeholder in Flipkart. It had bought 23.6% stake in $2.5 billion last year. SoftBank has ten days to decide whether it wants to sell its stake or not. In case of stay, SoftBank would be the second largest stakeholder in Flipkart after Walmart.
There are also reports that SoftBank was also in discussion with Walmart for deciding its role in Flipkart. The official sources also suggest that SoftBank will not sell its stake. This is because the bank believes that the value of Flipkart will increase under Walmart leadership. The experts are also hopeful that SoftBank will retain its stake for the next 6-12 months to avoid taxes. The deal between Flipkart and Walmart also shows that this Indian e-commerce giant has the worth of $20.7 billion.
Also, SoftBank does not want to exit Flipkart because such an exit would mean that SoftBank is leaving Indian e-commerce industry. Indian e-commerce industry is booming and the experts are hoping that its worth would reach more than $200 billion in next ten years.