Japanese internet and telecoms group SoftBank has reportedly agreed to sell its 21% stake in Flipkart to retail major Walmart.
Last week, the company’s chairman Masayoshi Son said he was still undecided on the sale, reported The Economic Times.
SoftBank invested close to $2.5bn in Flipkart through its Vision Fund and the latest deal will value its stake close to $4bn if it materialises.
The company has been delaying the deal as Vision Fund does not hold a tax treaty with India, given that it is registered in Jersey.
Earlier this month, SoftBank confirmed that US retail major Walmart reached a final agreement to buy a 77% stake in the India-based online retailer Flipkart for $16bn.
The investment, currently subject to regulatory approval in India, will be used to accelerate Flipkart’s business in India through technology.
Following the deal, Walmart plans to concentrate on serving customers and supporting the Indian online retailer to become a publicly listed company.
The deal will see Walmart and Amazon, which has been expanding with an aggressive push since it entered the Indian market in 2013, compete against each other in one of the world’s fastest-growing markets.
Although Flipkart is a major player in terms of sales in the Indian online market, Amazon has been posing a huge challenge to its growth.
Due to greater access to the internet, Indian consumers are opting for online shopping, with sales touching around $20bn in 2017. The one billion plus population of India also proves to be a lucrative market for overseas players such as Walmart.