Amazon has made a formal offer for a 60% stake in Indian e-Commerce firm Flipkart, sources told CNBC TV-18. The e-Commerce giant also is offering a $2 billion breakup fee in recognition of the regulatory challenges the deal would face, and is seeking a non-compete agreement with the founders of Flipkart.
The offer is likely on par with the bid from Walmart, which reportedly is preferred by major investors and the online retailer’s founders. However, Japan-based Softbank, which controls a 20% stake in Flipkart, favors a deal with Amazon, according to The Economic Times. The Walmart deal would retain Flipkart’s existing structure, while Amazon hasn’t released details on its plans.
Walmart may gain four seats on Flipkart’s 10-member board, and it may be interested in a 55% to 60% stake valued at $18 billion to $20 billion, sources told The Economic Times. The stake could reach as high as 80%, reported Bloomberg.
Additionally, an acquisition by Walmart could include Google parent Alphabet taking a minority stake in Flipkart valued at $1 billion to $2 billion.
Amazon had made an offer for a 51% to 55% stake in Flipkart in 2016, but the company vetoed the deal, people familiar with the matter told Reuters. The price was considered too low at the time.