Amazon interested in buying 60 percent stake in Flipkart: report

The e-commerce giant becomes second US company interested in Flipkart, after Walmart.

Amazon is reportedly interested in buying a majority of the stake in the Indian e-commerce giant Flipkart, making it the second US company to show interest after Walmart.

According to CNBC TV 18, Amazon has put forward an official offer to buy 60 percent stake in the Bangalore-based Flipkart, if its founders agree to a non-compete agreement.

By agreeing to a non-compete agreement, the founders of Flipkart cannot enter into or start a similar business that will be in competition with Amazon.

The decision by Amazon is seen as a move to prevent Walmart from becoming the largest shareholder in Flipkart. Walmart and Flipkar were earlier reportedly in investment discussions.

Amazon has offered a breakup fee of $2 billion, similar to Walmart’s offer. Walmart also had offered a buyout of over 80 percent stake in Flipkart.

Flipkart was founded in October 2007 by Sachin Bansal and Binny Bansal, both ex-Amazon employees.

At the moment, Walmart seems to be the frontrunner, as Amazon chief Jeff Bezos has reportedly not given any surety regarding retaining the current structure of Flipkart, which Walmart has agreed to it.

Walmart has said that it will retain the management team of Flipkart, including its current CEO Kalyan Krishnamurthy.

The swift move by Amazon after Softbank, which owns a fifth of India’s most valuable startup, approached Walmart Global CEO Doug McMillon.

There were also reports that the deal between Flipkart and Walmart could be closed within weeks following Sachin Bansal’s return from the US after the final round of discussion with Walmart executives. Reports also indicate that a Walmart global team is heading to India.

Currently, Flipkart and Amazon India are rivals in Indian e-commerce sphere. Both companies are based in Bangalore. Flipkart had the market monopoly till the US-giant entered the Indian market.

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