New Delhi: The Competition Commission on Wednesday said it has cleared US retail giant Walmart's proposed acquisition of Flipkart, a deal estimated to be worth USD 16 billion.
The approval comes less than three months after the announcement of the mega deal, which is also being opposed by various trader organisations.
In May, Walmart announced acquisition of 77 per cent stake of Flipkart in its biggest takeover till date.
"@CCI_India approves proposed acquisition of Flipkart Private Limited by Wal-Mart International Holdings, Inc," the regulator said in a tweet.
Mergers and acquisitions beyond a certain threshold require the approval of the Competition Commission of India (CCI).
Welcoming the regulator's decision, Walmart said it remains committed to contributing to the Indian economy by supporting smallholder farmers, manufacturers, and its Kirana customers.
"Flipkart is a prominent player in India with a strong, entrepreneurial leadership team that is a good cultural fit with Walmart.
"We believe that the combination of Walmart's global expertise and Flipkart will position us for long-term success and enable us to contribute to the economic growth," it said.
Traders' body CAIT, which has been opposed to the deal, described the CCI approval as "most unfortunate" and said it would approach the court against the decision.
In June, more than 100 trader organisations opposed the deal stating it will cause "irreversible damage" to small traders and endanger jobs for thousands.
As per the notice submitted to the CCI, the acquisition of majority stake in Flipkart will be done through Wal-Mart International Holdings.
The proposed transaction would be effected pursuant to the share purchase agreement and the share issuance and acquisition agreement entered into on May 9 by and among Walmart's subsidiary and Flipkart, the notice said.
In June, Walmart said that it expects to close the deal this year.
"In May 2018, the company announced it will pay approximately USD 16 billion in exchange for approximately 77 per cent of the outstanding shares of Flipkart Group (Flipkart). The investment includes USD 2 billion of new equity funding.
"...closing is expected later this calendar year, and is subject to regulatory approval," the American retail major had said in a filing to the US Securities and Exchange Commission (SEC).
The US India Strategic Partnership Forum (USISPF) said the deal is good for India as a whole.
The deal will strengthen the agriculture supply chain and create new skilled jobs, supporting the 'Make in India' initiative, USISPF President and CEO Mukesh Aghi said in a statement. Walmart is a USISPF member.
Comments
0 comment