The Competition Cimmission of India has approved Walmart’s acquisition of the homegrown e-tailer, Flipkart. In May this year, Walmart had announced that it would buy majority stake in Flipkart. The American retail giant was waiting for the government’s approval to carry out the deal.
“The commission is of the opinion that the proposed combination is not likely to have an appreciable adverse effect on competition in India and therefore, the same is hereby approved,” the CCI said in its order letter.
CCI also said the two parties were not close competitors in the B2B sales nor did they have a combined market share that could raise competition concern.
Walmart will now subscribe to the ordinary shares issued by Flipkart for an aggregate purchase price of $2 billion in cash.
Flipkart’s Co-Founder and Executive Chairman Sachin Bansal is expected to exit the firm, selling his 5.5 percent stake. Binny Bansal will be selling about 10 percent of his current holdings, lowering his stake to about 4.5 percent from the current 5.1 percent.