Walmart has agreed to pay $16bn (£12bn) for a roughly 77pc stake in Indian online shopping site Flipkart, the US retailer’s biggest foreign investment ever as it battles rival Amazon in one of the world’s biggest emerging markets.
The remainder of the business will be held by some of Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, China’s Tencent Holdings, Tiger Global Management, and Microsoft Corp, the company said in a statement on Wednesday.
The investment was more than the $10-12bn given by sources close to the deal in the past week.
Walmart said it expected the deal to knock about 25-30 cents off its earnings in its current financial year, assuming the deal closes at the end of the second quarter.
It also said that the deal included $2bn of funding from new equity in Flipkart, which could be sold to additional investors in the future, diluting the US company’s overall stake.
The agreement comes just over a week after Walmart revealed plans to hand over control of its Asda chain in the UK to Sainsbury’s, creating a combined group in which it would hold a 42pc stake.