Amazon Turns Tables Around; In Talks to Acquire Its Competitor- Flipkart

Flipkart Offers is in talks with Walmart one of the biggest US giant for over 2 months now, but the negotiation on share prices is still consistent. Walmart had proposed to acquire a 21% to 51% stake in the company. However, Amazon has turned the table around by proposing to acquire one its biggest rival and competitor in India ‘Flipkart’. If reports are to believed Amazon has also initiated talks with Flipkart few weeks ago.

Wal-Mart had proposed to do the acquisition by a mix of primary and secondary shares and the estimated valuation amount was around $ 10 to 12 billion. However, investors of Flipkart expect the valuation to be around $20 to 22 billion. This seems to be the major reason why Flipkart is now considering deals from other potential acquirers like Amazon India. The talks have already begun between Amazon and Flipkart but nothing has progressed as such. Amazon has offered a breakup fee of around $1 billion to $2 billion to Flipkart and on the other hand, Flipkart is valued around $18 billion to $ 20 billion. If reports are to be believed, Amazon has offered share purchases in Flipkart that could value around $21 billion.

Well the Indian home grown e-commerce giant, started in 2007 by Sachin Bansal and Binny Bansal is one of the biggest e-commerce giants in our country. Flipkart also owns one of the biggest fashion portal websites in India “myntra” and has also acquired “jabong”. Apart from this, it also has its own digital payments app “phonepe” and eBay India in its pocket. Flipkart has risen over $6.1 billion funding from a huge number of investors. All this makes it one of the most preferred options for investors to gain stake hold in the company.

However, the previous financial year 2017 seemed to be a bad year for this Indian giant in terms of profits. Though, the company had observed a rise in its sales in 2017 at around $8.3 million which was higher as against the sales figures of goods in the previous year that is 2016 which stood around $6.4 million. However, despite the increase in sales of goods sold the company still couldn’t manage to gain significant profits and encountered a loss of around $1.3 billion which was way higher than the losses accounted in the year 2016 which was $801.8 million.

Amazon India has already acquired the Indian markets with its aggressive strategies by capturing the hearts of customers by offering lucrative discount offers, heavy discounts and the latest in line Amazon prime video. By offering subscription rates at very nominal levels, Amazon India has managed to get many customers to its kitty. Now, the war stays between Walmart and Amazon India as Walmart plans to get its hold on Indian markets with this merger deal with Flipkart Today's Offers. US Giant Walmart already has a very strong dominance in US markets but, if it gets the acquisition of Flipkart by getting a majority stake in it this would prove to be one of the biggest investments for Walmart in the retail e-commerce space. But with Amazon’s sudden discussions with Flipkart have turned the table round.