After acquiring Indian e-commerce unicorn Flipkart, US giant Walmart Inc. has finally sought approval of India’s Anti-Trust Regulator for its mega $16 billion acquisition.
According to a Regulatory Filing sent to Competition Commission of India (CCI), Walmart has said that its buyout of Flipkart does not result in competition concerns as the broader retail market in India remains unaffected by the deal.
Walmart has reported CCI that Flipkart is a Singapore based entity and the deal has been done through its subsidiary Walmart International Holdings. Moreover, Since Flipkart India is primarily engaged in the business of wholesale cash and carry goods, its acquisition will only affect B2B markets, Walmart added.
Notably, Walmart has been facing resistance by tough regulations that prohibit foreign investment in multi-brand retail, which is why it started discussions with Flipkart almost two years ago. Interestingly, the US retail mammoth journey in India has never been smooth. In 2007, had set up a joint venture with Bharti Enterprises Ltd for wholesale stores. Bharti exited the joint venture six years later.
Walmart CCI approval was likely expected as traders body, sellers association and swadeshi lobby led by Swadesh Jagaran Manch have been opposing the deal vehemently stating that it will result into a monopoly against government regulations.
To recap, Walmart has recently completed its $16 billion acquisition over 77% stakes in Flipkart valuing the online retailer at about $21 billion. As a part of the biggest e-commerce deal that has just been completed, Walmart will be investing $2 billion directly into Flipkart and buy the rest of its stake from most of Flipkart’s investors including SoftBank Group, Accel Partners, Naspers and eBay Inc.