Walmart has filed an application before Competition Commission of India (CCI) for the approval of the proposed acquisition of a majority stake in the home-grown Flipkart. According to the petition filed before the CCI, the proposed deal doesn’t not only violate any rules and won’t cause competition concerns. If you are unaware, Walmart had acquired more than 72% stake on Flipkart in a mega e-commerce acquisition.
The Walmart sources revealed that the proposed acquisition would be done through its subsidiary Wal-Mart International Holdings. In the petition, Walmart disclosed that the Flipkart is a Singapore-based investment holding firm, which is carrying out business through direct and indirect subsidiaries. Flipkart is primarily engaged in marketplace based e-commerce business connecting buyers and sellers through its online portal.
The basic rule of business in India is that mergers and acquisitions beyond a certain level require the approval of the CCI. In the application filed before the CCI, the US-based e-commerce giant disclosed that the proposed transaction will come into effect after the approval of the share purchase agreement and the share issuance and acquisition agreement entered into on May 9.
The main aim of the acquisition is to help Flipkart to perform day to day business. However, Walmart will be pumping money frequently similar to that of Amazon. You can also expect the addition of new products within the next few months and opening of new fulfillment centers.
