Online retail giant Amazon has made a formal offer to buy a 60 percent stake in India’s leading e-commerce marketplace Flipkart, as per the report by CNBC TV18. The report further states that the deal offered by Amazon to merge Flipkart entirely with its Indian arm and sought a non-compete agreement with Flipkart’s founders for 1-2 years.
Amazon’s acquiring majority stake in Flipkart comes at a time when Walmart is close to completing a $12 billion deal to pick up an equivalent amount of stake in the Indian firm. Meanwhile, talks between Walmart and Flipkart are on for months now and the deal is expected to close soon.
According to reports, Amazon is also offering a breakup fee of $2 billion to underscore its interest. This fee, also called a termination fee, comes into effect if the deal falls through halfway into negotiations. But regulatory hassles may put a stop to Amazon’s plans. Talks of Amazon making a counter-bid to pick up stake in Flipkart have been doing the rounds for a while now, but insiders had said that the US giant had not come to the table yet and talks between Walmart were progressing positively.