'Oops': Walmart's biggest deal ever, announced by SoftBank's CEO

Representative Image
This isn’t the way multibillion-dollar deals usually get announced.

Hours before Walmart Inc. was scheduled to unveil the largest acquisition in its history, Masayoshi Son, chief executive officer of SoftBank Group Corp., spilled the beans to a roomful of investors and journalists in Tokyo. He confirmed that the US retailer has agreed to buy control of Flipkart Online Services Pvt, the leading Indian e-commerce player backed by SoftBank.

“I think we announced it last night,” he said, during an investor call after his own company’s earnings. “If not, well then that means I’m just spouting this out. In any case, it’s been decided.”

Son made the comment as he was underscoring the point that his investments are paying off. The Japanese company, through its Vision Fund, invested $2.5 billion in Flipkart and that stake will be worth about $4 billion in the deal, Son told a briefing on Wednesday. He didn’t elaborate on other terms of the Walmart takeover. The deal values Flipkart at about $20 billion, people familiar with the matter have said previously.

An announcement is expected later on Wednesday.

After his initial comments, Son noticed a sheet of paper that had been left on the podium for his attention. He picked it up and smiled.

“Oh, I see here that the Flipkart-Walmart deal isn’t fully confirmed at this point in time,” he said to the laughing audience. “Yabai desune,” he added, which translates in Japanese roughly to “Oops” or “That’s not good.”

“What should I do?” he said. “Well, I said it. I can’t take it back. So that’s it.”

Flipkart, India’s biggest online retailer, is a key part of Walmart’s efforts to expand in the country and strike a blow against Amazon.com Inc. in the world’s second-most populous nation.

The deal -- which may be the biggest ever in e-commerce -- gives Walmart greater access to an Indian e-commerce market that Morgan Stanley has estimated will grow to $200 billion in about a decade. Flipkart, meanwhile, gets additional capital and expertise to battle Amazon, which has spent billions of dollars to gain customers in India. Online sales in the world’s second most-populous nation are growing about 35 percent a year, according to data tracker Euromonitor, fueled by a rising middle class and urbanization that present an attractive environment for e-commerce.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel