Despite the fact that Walmart and Flipkart deal has reportedly entered the final stage of negotiation, Amazon on Wednesday made an audacious bid to acquire 60% stake in India’s home grown e-commerce behemoth. This is according to a report filed by CNBC TV 18, one of India’s popular business TV channels.
The report claims that Amazon has offered Flipkart a breakup fee of $2 billion and also adds that Amazon’s offer is almost on par of Walmart. If this is true then Amazon’s bidding price should be close to $12 billion, which is exactly the amount that Walmart has offered.
The rumors of Amazon is interested in buying out India’s largest e-commerce company has been doing rounds ever since Walmart entered into the acquisition fray earlier this year. However, Amazon’s bid may not carry the blessings of the Indian government, since the Seattle based online giant is already a dominant player in the Indian e commerce market.
In such a situation, Flipkart’s acquisition may lead to complete monopoly in India’s nascent online shopping market. A complicated situation that Indian government may probably want to avoid at any cost.
Flipkart Management not in favor of Amazon Deal
Most of the key members in Flipkart’s top management are unanimously against sale out to Amazon, according to sources close to the matter. Sources add that management’s view may not change even if the Seattle based giant increases the bidding prices.
Some experts claimed that Flipkart’s management is very well aware that this deal may result in lot of complications and it wants to play safe by going with Walmart.
If Walmart does succeed in lapping up this deal then it will pitch two of America greatest corporate rival in India’s e-commerce battle. Such a situation was unthinkable few years back when Flipkart’s original co-founders Sachin and Binny Bansal were calling the shots. Those were probably the hey days not only for Flipkart but also for india’s entire e-commerce industry. But today it appears that Flipkart and India’s e-commerce industry are going through great transitory phase, with road ahead looking exciting as well as uncertain.