As Walmart bought Flipkart, multinational retail corporation's CEO on Wednesday confirmed Sachin Bansal’s exit but also said there are no other major changes in the leadership.
As Walmart bought Flipkart, multinational retail corporation‘s CEO on Wednesday confirmed Sachin Bansal’s exit but also said there are no other major changes in the leadership. “Don’t see more changes in leadership apart from Sachin Bansal’s exit,” Doug McMillan, CEO, Walmart said while addressing the Flipkart employees after the deal. Sachin and Binny Bansal (both are not related) are the founders of the homegrown e-commerce company that was established in 2007. While Sachin Bansal makes an exit after the deal, Binny Bansal continues to be the part of the company. Doug McMillon also said the Walmart management is impressed with Flipkart and its group companies and its ability to leverage technology efficiently..
Talking to the Flipkart employees, Doug McMillon also said that the company will do 100% buyback of employee vested shares. “Our investment will benefit India by providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs,” Doug McMillon said.
India is a priority market for us and this investment represents unique opportunity, said Brett Briggs, CFO, Walmart. Flipkart has seen rapid growth in the last two years and Walmart expects strong growth trajectory for the company to continue, he added. The Walmart-Flipkart deal will be financed with debt and equity, he said. Walmart is also in discussion with other players to join in funding, he further said.
In the largest e-commerce deal ever, Walmart on Wednesday announced its acquisition of India’s largest online retailer Flipkart in a $16 billion deal, taking on Amazon in one of the fastest growing e-commerce markets. The world’s largest retailer will acquire 77 percent stake in the Singapore-based holding firm of Flipkart through its retail arm, said Walmart in a release. Walmart’s investment includes new equity funding to the tune of $2 billion. The deal values Flipkart at around $20.8 billion.
“The deal indicates the attractiveness of India’s consumption market for global majors. With Walmart acquiring stake in Flipkart, we expect enhanced thrust on the online grocery segment. We expect online grocery to be the fastest growing segment in the e-retail space, growing at a 65-70% CAGR to touch Rs 100 billion in revenues by fiscal 2020,” Crisil said on the deal.