~ Auto Buzz ~: eBay Cashing Out On Flipkart-Walmart Deal, Relaunching In India

Thursday, 10 May 2018

eBay Cashing Out On Flipkart-Walmart Deal, Relaunching In India

After Walmart’s acquisition, Flipkart will go through a corporate restructuring, with many of its major investors selling their stakes to the former. As part of the move, eBay will divest its entire stake in Flipkart while also terminating all of their previously established relationships and commercial agreements. The company intends to receive $1.1 billion as proceeds from the sale of its share in the Indian e-commerce leader. eBay.in, the Indian arm of the U.S. firm, currently operates under Flipkart with a license from its parent, which the company also plans to cancel. After the Walmart-Flipkart deal is closed, eBay will relaunch eBay India with a different strategy, the company announced. eBay India will then initially focus on cross-border trade, both from and to India, with its parent having confidence the company can succeed on its own.

Around this time last year, Flipkart had acquired eBay’s India business, with the latter investing around $500 million in exchange for a five-percent stake in the Indian online retailer. eBay India continued to operate as an independent entity with a series of agreements in place between the two parties. In the past year, the U.S. online retailer has more than doubled its investment after Walmart valued Flipkart at over $20 billion in a recently announced deal. Amazon had also reportedly made a comparable offer to acquire Flipkart, which would have given it a near-monopoly on the Indian e-commerce market, though the deal would have likely failed to pass antitrust scrutiny and was presumably made so as to drive up the acquisition price for Walmart.

Walmart yesterday confirmed to have sealed the deal to acquire a controlling stake in the Indian e-commerce giant. The company will secure a 77-percent share of Flipkart’s business for a sum of $16 billion. A number of stakeholders including Microsoft, Tencent, and Tiger Global will continue to hold the remaining 23-percent portion, with SoftBank and eBay cashing out after more than doubling their investments. Most of Flipkart’s top management will be retained as part of the deal, with a few Walmart representatives joining its board after the deal is closed. The company’s plan to go public in the future will remain unchanged after Walmart’s acquisition as well.

The post eBay Cashing Out On Flipkart-Walmart Deal, Relaunching In India appeared first on AndroidHeadlines.com |.

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