Walmart Seeks CCI’s Approval For Flipkart Acquisition

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    Walmart, the global retail giant has approached the Competitive Commission of India (CCI), to secure the governing body's approval for its proposed acquisition of a major stake in the domestic e-commerce major Flipkart.

    Walmart Seeks CCI’s Approval For Flipkart Acquisition

    Walmart states that the deal does not raise any kind of competition concerns in the country. 

    The CCI is the statutory body of the Government of India which is responsible for enforcing the Competition Act of 2002, throughout India. Its main responsibility includes preventing activities that will have an appreciable negative effect on the competition in India.

    The said acquisition will be done through Walmart's subsidiary - Wal-Mart International Holdings.

    Walmart has informed the regulator that Flipkart is a Singapore based investment holding firm, which has direct and indirect subsidiaries present both in India and elsewhere in the world.

    Flipkart is an Indian electronic commerce company based in Bengaluru. The company competes primarily with Amazon's Indian subsidiary and Snapdeal, a domestic rival. Flipkart is engaged in the business of wholesale cash and carry of goods by providing e-commerce platforms to facilitate trade between customers and sellers in India.

    In India, Mergers and Acquisitions beyond a certain set threshold limit requires approval from the Competition Commission of India.

    Currently, the thresholds for CCI approval are a combined turnover of Rs 3,000 crore for a domestic firm, Rs 6,000 crore for domestic firms with overseas presence and Rs 24,000 crore for a conglomerate with local domestic presence. However, firms and conglomerates will have to approach CCI for approval if the combined revenue of the Indian operations of the acquirer and the acquired are at least Rs 1,500 crore.

    During fiscal 2017, the e-commerce firm - Flipkart's wholesale unit reported a turnover of $2.3 billion up from the previous turnover of $2 billion during fiscal 2016. It also clocked an all-time surge in its annual turnover to the tune of 19 percent during fiscal 2017.

    As per the notice submitted by Wal-Mart International Holdings, the proposed transaction will be effected pursuant to the share purchase agreement and the share issuance and acquisition agreement which occurred on May 9 between Flipkart and Walmart's subsidiary.

    Read more about: walmart flipkart acquisition
    Story first published: Saturday, May 19, 2018, 18:18 [IST]
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