Walmart preferred to acquire India’s Flipkart

Walmart Inc. will likely emerge as the favourite choice to take over India’s largest e-commerce Flipkart Online Services Pvt. instead of rival Amazon .com, Bloomberg report stated on Wednesday.

According to some people familiar with the issue, Flipkart is planning to favour Walmart rather than Amazon because of a bigger certainty of the acquisition. Both the U.S retailing giants are competing to buy Flipkart’s stake worth US$ 20 billion.

Walmart has no online retail in India while Amazon is Flipkart’s primary rival. Also, Walmart is Flipkart founders Binny Bansal and Sachin choose Walmart because they would continue to lead the business and the Arkansas-based firm has shown commitment to India’s market.

Both Walmart and Flipkart have discussed the deal since last year, and yet it could still change.

Flipkart’s shareholder prefers Amazon

The founders’ choice, however, differs from that of Flipkart’s shareholders. SoftBank Group Corp., the online retailer’s main shareholders, may favour Amazon because of its success in pioneering the e-commerce sector, one of the sources claimed.

Amazon may feel a bit optimistic. India’s Amazon chief Amit Agarwal has managed to adapt the site to local culture and conditions. Amazon founder Jeff Bezos has invested US$ 5.5 billion in India.

If Amazon takes over Flipkart, it is predicted that they will dominate 80 percent of India’s online retail market.

Still, Amazon will not find the deal easy

One source said that Amazon deal, however, will be more complicated than that with Walmart. Amazon will likely have to guarantee that it can run two online stores as independent brands. Bezos will also have to convince Flipkart and its board to take a chance on government’s green light. Amazon will probably prepare a vast breakup free in case such a deal does not work.

Flipkart, Amazon , and Walmart have yet to give any comments regarding the issue.

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