Amazon offers to buy 60 per cent stake in Flipkart

Amazon offers to buy 60 per cent stake in Flipkart

Rival Amazon is making a last ditch effort to avert a formidable combine of its competitors.

India's e-commerce firm Flipkart logo is seen at headquarters in Bengaluru.

Amazon also offered Flipkart a breakup fee of $2 billion, the TV channel reported. Reports suggest that the deal could be wrapped up sometime in June.

A spokesman for Walmart declined to comment, while Amazon said it does not offer comments on rumors and speculation.

Amazon has been pumping money into India. There are investors who would question Amazon about its investments.

Amazon is also seeking a non-compete agreement with Flipkart's founders, the report added. Walmart doesn't have an online presence in India, but as of this year, Amazon has emerged as the leading e-commerce player in the country.

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However, a source clarified that while talks have been on for a while now, Walmart and some Flipkart investors, including Japan's SoftBank Group Corp., are yet to agree on the final details. Amazon has committed $5 billion to the Indian market. Jeff Bezos refused to comment on the report.

Softbank, which controls 25 percent of Flipkart, has apprehensions about selling to Walmart and has been encouraging the Amazon offer.

The ToI report highlighted that a deal with Flipkart would give the American retailer much-needed thrust to expedite its online growth plans into remaining major Asian markets.

Even for Flipkart, merging itself with Amazon at this stage will be like leaving a lot at the table, finds Ujjawal Chaudhry, engagement manager, e-tailing, RedSeer. Talks of Walmart wanting to acquire a massive stake of Flipkart have been on since February. It might not want to leave the game this early. Amazon entered the Indian market around 2012 and has 31 percent of the online retail market, according to Forrester, eight percentage points behind its homegrown rival.

SoftBank stands to make a tidy profit on a deal it cut past year.

The restriction on the right to transfer shares in a private company usually takes the form of a requirement that the transfer be first approved by the company's board of directors or a requirement that the shares be first offered to be transferred to existing shareholders.

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