Amazon makes a formal offer to buy 60 percent stake in Flipkart Inc has made a formal offer to buy a 60 percent stake in Flipkart, CNBC-TV18 reported on Wednesday, threatening to complicate Walmart Inc’s bid to buy a majority stake in the Indian online retailer.

Sources told Reuters earlier this month that Walmart was likely to reach a deal to buy a majority stake in Flipkart, Amazon’s biggest competitor in India. The deal was expected to be completed by the end of June for $10 billion to $12 billion, likely making it Walmart’s largest acquisition to date.

Two sources close to the matter, asking not to be named, confirmed to Reuters on Wednesday that Amazon was interested in buying Flipkart, but declined to give further details.

A spokesman for Walmart declined to comment, while Amazon said it does not offer comments on rumors and speculation. Flipkart did not immediately respond to an email seeking comment.

Amazon’s offer could kickstart a new battle between it and Walmart, already fierce retail rivals in the United States that have reportedly dueled over at least one acquisition before. The bid also emphasizes the importance of gaining a greater foothold in online sales in India, a market expected to be worth $200 billion a year within a decade.

For Amazon, throwing its hat in the ring could be as much about derailing Walmart’s efforts as it would be about defending its 27 percent market share in India, consultants and investors said. The company has been pouring billions of dollars in the country to ship goods to shoppers faster.

If Walmart succeeded in buying Flipkart, the impact on Amazon could be intense price competition from a deep-pocketed competitor, retail consultants said.

On Wednesday, Indian broadcaster CNBC-TV18 reported that Amazon had offered Flipkart a breakup fee of $2 billion to convince it to discuss an offer which analysts say would bring with it substantial antitrust challenges, as Flipkart and Amazon dominate the online shopping space in Asia’s third-largest economy.

Flipkart had vetoed an approach from Amazon for a 51 to 55 percent stake in the company two years ago, a source told Reuters, judging its offered price as far too low at the time.

“Now with Walmart in the mix things are different,” the source said. “To the best of my knowledge no decision has been made yet. There is no deadline per se.”

CNBC-TV18, citing unnamed sources, said Amazon’s new bid was likely to be on a par with Walmart’s, but that Flipkart’s investors and founders continue to favor the deal with Walmart, with founder Sachin Bansal overseeing final negotiations.


Walmart and Amazon’s interest in gaining share in India comes after both retailers have struggled to grow in China, ultimately losing ground to Chinese e-commerce firm Alibaba Group Holding Ltd.

Walmart’s urgency to stem market share losses to rivals like Aldi or Amazon has also seen it launch talks to merge its British arm Asda with Sainsbury’s.

It marks a shift in Walmart’s traditional approach of building a business on its own.

Overall, sales from Walmart International, which runs about 6,300 stores globally, stood at $118 billion in the fiscal year ended 2018, down nearly 14 percent from 2014.

This was in large part due to adverse currency movements, which hurt the money repatriated from its foreign arms, but also because of a series of missteps in major markets.

In an effort to fix its international performance, Walmart in January appointed Chief Operating Officer Judith McKenna to run its international unit and has indicated it will focus on its core North American markets and growth markets like China and India.

Walmart initially entered the Indian market in 2007 through a joint venture with India’s Bharti Enterprises, years before Amazon arrived.

That joint venture was called off in 2013, but it still owns 21 wholesale cash-and-carry supermarkets in the country.

In an interview with Reuters on Tuesday, McKenna said India was a “growth market,” and downplayed analyst criticism that the company has been slow to move in the country.

“We have been deliberate and thoughtful, we were not slow to respond,” she said.

Walmart’s shares were 0.84 percent down at $86.67 during afternoon US trading.

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