Flipkart co-founder likely to quit after Walmart takeover

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In a move seen as a precursor to USA retail giant Walmart acquiring a majority stake in Flipkart, the Indian e-commerce player has bought back shares worth $350 million from investors in its Singapore-based parent to regain private limited status in the country. Google's parent company Alphabet Inc. also participated in the deal, which valued Flipkart at between $20-22 billion. The US retail giant will buy both existing as well as new Flipkart shares and it is possible that numerous early investors in the company such as Tiger Global, Accel and Naspers maybe selling their entire stakes.

Last year, SoftBank Vision Fund had pumped in an estimated United States dollars 2.5 billion in Flipkart for about 20 per cent stake in the company.

The move is said to be in line with Flipkart's efforts to ease of the acquisition deal with Walmart.

"Binny and Krishnamurthy (Flipkart's web retailer's CEO) have backed the deal with Walmart and the two are seen leading the final negotiations, which will likely result in a share purchase agreement by Walmart by early next week, ' another person close to the deal told TOI".

CEO Krishnamurthy is expected to continue in his role, but numerous reports have been pointing to the exit of one of the two founders, Sachin Bansal, who is now the executive chairman of the company. Kalyan Krishnamurthy got promoted as Flipkart CEO in 2017 after the good performance of the company during the period of festive sales.

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The partnership of Flipkart co-founders Sachin Bansal and Binny Bansal is the stuff of modern Indian business legend.

Walmart is gearing up to buy Flipkart in a $14.6-$16 billion deal, according to a recent report.

A spokesman for Walmart declined to comment. Interestingly, Amazon has also been in talks to acquire a majority stake in Flipkart, suggesting the U.S. company does not want Walmart to enter the Indian market. However, Tiger Global, Accel, Microsoft, Naspers and Ebay remain on the cap table of Flipkart. The Bansals together own around 10 per cent stake in Flipkart, which makes them collectively worth around $2 billion. However, Amazon was indeed interested in buying Flipkart, said two sources, asking not to be named.

Amazon has emerged as new contender for Indian e-commerce giant Flipkart.

"The stakes are really high for Walmart", said Brian Yarbrough, senior research analyst with Edward Jones.