Walmart may put $ 3 billion more in Flipkart, take over 85% stake

Doug McMillon CEO of Walmart Inc. Adam Jeffery  CNBC  Getty Images

As a portion of the bargain, wal mart will initially appoint five supervisors to Flipkart's plank, two supervisors will probably be appointed by minority investors whilst Bansal will take a single plank seat, as stated by the filing.

Walmart also mentioned no celebration would be responsible to pay a termination fee if a share issuance or invest in arrangement with Flipkart were also terminated.

Similarly, minority investors holding 60% of Flipkart shares and acting together will have veto rights to prevent significant transactions involving Flipkart while investors holding 40% shares will have veto rights to prevent certain transactions between Flipkart and Walmart. "No termination fee would be payable if the share issuance agreement or the share purchase agreement were terminated", Walmart said in the filing.

Moreover, Bentonville, Arkansas-based United States retailer said in the filing that it has the right to appoint or change chief executive or other principal executives of the country's largest e-commerce company.

For the first time, Walmart said the agreement also confers on it the right to seek an issue of a second tranche of fresh Flipkart shares "at any time after the closing of the transaction and on or before the first anniversary of the closing" for an aggregate purchase price of up to $3 billion. This is the largest e-commerce acquisition across the world and also the largest exit for private equity and venture capital investors in India.

Walmart said it can, in future, reconstruct a board member together with the approval of the majority of those Flipkart supervisors.


With Flipkart founded in 2007 by former Amazon employees Sachin and Binny Bansal and with Walmart becoming its largest stakeholder, more new information about their deal is broadcasted all over the media. Flipkart may opt for an initial public offering after four years of closing the Walmart deal at a valuation no less than what was paid by Walmart.

The Bentonville, Arkansas-based retailer and its appointed directors will have veto rights over specific decisions related to Flipkart's business and activities.

Reuters formerly noted that Google-parent Alphabet was in talks to spend £ 3 billion to get a roughly 15% stake in Flipkart. SoftBank holds approximately 22% in Flipkart.

If Walmart transfers a sufficient number of Flipkart shares which gives rise to a situation that it no longer controls a majority of the Flipkart shares, then each minority shareholder will also be entitled to transfer all of its holding to the proposed buyer of Walmart's holding.

Two directors are expected to be appointed by minority shareholders (which include Tiger Global, Tencent and Microsoft) and one by cofounder (Binny Bansal), who holds a 4-5% stake.

SoftBank Chief Executive Masayoshi Son said that their investment from Flipkart had grown to nearly $4 billion.

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