Walmart Inc. announced in a media statement that it has acquired 77 percent stake in India's largest online retailer Flipkart for $16 billion in the world's biggest e-commerce deal. The remaining will be held by Flipkart's existing shareholders that include co-founder Binny Bansal, Tencent Holdings, Tiger Global Management and Microsoft.

The deal includes $2 billion in new equity funding and now values Flipkart at around $20.8 billion.

Flipkart co-founder and executive chairman Sachin Bansal will exit the company by selling his entire of 5.5 percent stake to Walmart, while Binny Bansal will stay in the business.

As per the deal, Walmart will support Flipkart's aim to transition into a publicly-listed, majority-owned subsidiary in the future and the two will maintain distinct brands and operating structures. Tencent and Tiger Global will remain on Flipkart's board along with new members from Walmart. The board will also include independent members.

The closing of the deal is expected to occur later this year, subject to regulatory approval.

SoftBank which is an existing investor will also sell the entire stake of 20 percent that it holds in Flipkart.

In the earnings webcast on Wednesday, Masayoshi Son said that Softbank infused $2.5 billion into Flipkart in August last year for around 20% stake in the company which now will value around $4 billion.

The deal will enable Walmart to capture a significant presence in the fast-growing online retail market in India. Also, the transaction will give US retail giant an edge over Amazon.com Inc that has already committed $5.5 billion in investments in its India business. Also Read: Amazon Infuses Rs. 2600 Crore Into Its India Business

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