Walmart, in a US Securities and Exchange Commission (SEC) filing, gave details of its agreement to take about 77 per cent stake in Flipkart through infusing United States dollars 2 billion cash in the company and buying some of Flipkart investors' stake for USD 14 billion. The top-up from Walmart, if made will be at the same valuation of around $21 billion that was ascribed to Flipkart, the filing said.
Following the acquisition, the Flipkart board will initially have eight directors with five being appointed by Walmart, two being appointed by certain minority shareholders and one Flipkart founder (Binny Bansal).
Walmart mentioned on Saturday at a filing using a US regulator that it could require India's Flipkart people in since four decades, inventing for the very first time an expected record deadline for Walmart's largest-ever acquisition.
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Upon the terms and subject to the conditions set forth in the Share Purchase Agreement, contemporaneously with the closing of the Share Issuance, Walmart will purchase from the Sellers Preference Shares and Ordinary Shares of Flipkart for an aggregate purchase price of approximately $14 billion in cash (the "Secondary Share Purchase", and together with the Share Issuance, the "Transactions").
Walmart said, "The Share Issuance Agreement and Share Purchase Agreement also contain customary termination rights for the parties, including, among others, by the Purchaser if the Transactions have not closed by March 9, 2019. No termination fee would be payable if the share issuance agreement or the share purchase agreement were terminated", Walmart said in the filing.
Furthermore, Walmart has shed some light on its plans to come out with an initial public offering (IPO) for Flipkart.
Minority investors holding 60% of Flipkart's shares "may effect an IPO" four years after the close of the transaction, Walmart said in the filing to the US Securities and Exchange Commission.
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Walmart said it may, in future, appoint a sixth board member with the approval of the majority of the Flipkart directors. For at least two years following closing of the transactions, two of the Walmart-appointed directors won't be affiliated with Walmart.
Last week, all significant shareholders in Flipkart like Naspers, venture fund Accel Partners and eBay had confirmed they were selling their shares to Walmart.
Walmart Inc., the world's largest retailer, could be forced to publicly list its newly acquired Indian e-commerce company, Flipkart Group, within four years at the request of a small minority of Flipkart shareholders, a public filing shows.
"Shareholders agreement would expire upon the consummation of the IPO, whether initiated by the board or the minority stockholders", it added.
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Even the financial Times newspaper reported Friday, citing unnamed sources, that Japan's SoftBank team, that owns a roughly 20 per cent stake in Flipkart, has been devoting its exit because to tax obligations since it observed farther price in Flipkart.