U.S. retail giant Walmart on Wednesday said it will buy a 77% stake in India’s largest e-commerce company Flipkart for $16 billion, in the biggest acquisition in local corporate history.

As part of the deal, Walmart will invest $2 billion in fresh capital into Flipkart and acquire the rest of the stake from existing investors. The deal values the whole company at $20.8 billion. Microsoft will join in as a key strategic and technology partner, Walmart said in a statment.

The deal is the largest in India, after Russian Rosneft’s $12.9 billion buyout of Essar Oil and is expected to put Walmart in a much better position to battle Amazon. 

Co-founder and Group CEO Sachin Bansal will exit the firm he set up with Binny in 2007 as an online bookstore, after selling his 5% stake. Binny will stay on as group chairman and CEO. Flipkart Group, registered in Bangalore and Singapore, has had a good run since its entry and captured about 39.5% of the e-commerce market on a standalone basis, while Amazon India controlled around 31.5% in 2017, according to a Forrester Research report.

The Bansals feature in the TIME list of 100 most influential people. To fuel its expansion and growth, the company acquired local players such as Myntra, Jabong, and PhonePe but was struggling to grow further until receiving huge cash injections last year from SoftBank and Tencent Holdings.

Tokyo-based SoftBank Group, the largest shareholder in Flipkart, will receive $4.5 billion for the entire 20.8% stake it holds after agreeing to sell down on Tuesday night. That marks a huge margin over the $2.5 billion investment it made just last year.

SoftBank Chairman and CEO Masayoshi Son said in a media conference on Wednesday: “It is a very big gain for the Vision Fund,” referring to a fund set up by the group to invest in innovative technology companies.

Sourced through Scoop.it from: asia.nikkei.com