Wal-Mart in talks to buy stake in Indian online retailer Flipkart

A general view shows a Wal-Mart store in Monterrey, Mexico, August 10, 2016. REUTERS/Daniel BecerrilA general view shows a Wal-Mart store in Monterrey, Mexico, August 10, 2016. REUTERS/Daniel Becerril

Wal-Mart Stores Inc is in talks to buy a minority stake in India’s largest e-commerce firm Flipkart as the world’s biggest retailer aims to break into a fast growing but highly competitive online retail market.

 U.S. retailer is looking to invest between $750 million and $1 billion in Flipkart, but the final value and size of the stake would depend on the outcome of talks about the Indian company’s overall valuation.A deal would pit Wal-Mart against U.S. rival Amazon.com Inc, which has been expanding rapidly in a market that Bank of America Merrill Lynch has forecast will surge to $220 billion in value of goods sold by 2025 from about $11 billion last year.

Wal-Mart operates 21 wholesale stores in the South Asian country, but is discouraged from setting up its own bricks-and-mortar shops by rules that limit foreign ownership for multi-brand retailers to 51 percent and the cost of setting up shops in a country as large as India. For Flipkart, a cash infusion from Wal-Mart would come in handy at a time when funding from traditional investors into the online space such as venture capital is proving harder to obtain amid worries about valuations in India.

The sources close to the two companies who have given this information declined to be identified because the talks are preliminary and have not been made public. Wal-Mart in India and Flipkart declined to comment.

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Martina T.
Martina Terzieva is a content writer for Business News Feeds. She likes to dig deep, find the most interesting things that happen and share them with the world. Besides news, Martina writes poetry, she's also a musician and a sound engineer.

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