South African Internet and entertainment firm Naspers sold its entire 11.18 percent stake in Indian e-commerce firm Flipkart to Walmart Inc for $2.2 billion, it said on Wednesday. Naspers said the proceeds will be used to reinforce its balance sheet and will be invested over time to accelerate the growth of Naspers' classifieds, online food delivery and fintech businesses globally. The firm also said it would also pursue other growth opportunities when they arise.
Launched in October 2007, Flipkart is India's largest e-commerce marketplace. Naspers initially invested in Flipkart in August 2012 and its cumulative investment to the point of sale amounts to $616 million.
The deal between Flipkart and Walmart, capping almost two years of talks, will help the Bentonville, Arkansas-based retailer fortify and boost market share against Amazon.com, which reportedly had tried to make a competing offer for a stake.
Buying a stake in Flipkart, which sells everything from soaps to smartphones and from books to clothes, gives Walmart access to the fledgling Indian e-commerce market that could potentially be worth $200 billion in a decade, according to Morgan Stanley.
Walmart said it plans to fund the deal through a combination of newly-issued debt and cash on hand.
Walmart warned that it expects the deal to hit its fiscal 2019 earnings per share by 25 cents to 30 cents if the deal closes as expected before the end of the second quarter.
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