As Walmart tries to expand its global grocery business, it has moved to purchase 73% of Flipkart for $16bn. Why? Indian laws don't allow Walmart to open physical stores. A purchase such as this therefore provides access to the Indian market and a well-known presence and network that stands alone. Further, it provides a springboard which is ready to be leveraged should the legal landscape for direct ownership change.
As it increasingly moves to be a technology-driven company, Walmart has pioneered blockchain technology in its supply chains in China and intends to do the same with Flipkart to ensure traceability and tracking in the food supply chain.
And why Flipkart in particular? Its large logistics network and proven ability to take on Amazon will undoubtedly have played a part. Walmart's goal here is clearly to become market leaders in India - and if you can afford it, why wouldn't you start at the top?
Walmart Inc. has decided to go all in on its deal to acquire Flipkart in a deal sealed on Thursday to buy 73% of the Indian ecommerce company in one of the biggest mergers and acquisitions in the country – spending at least $14.6 billion in the cash-and-stock buyout.