Walmart, eBay fresh round of talks likely for $12 bn deal with Flipkart

The logo of Flipkart is seen on the facade of the company's headquarters in Bengaluru
As Flipkart waits to close its $12 billion stake sale to Walmart, a fresh round of talks might happen between the US-based retail giant and global e-commerce giant eBay to figure out issues related to merchants.

According to a recent article in Recode, Walmart might have to negotiate with eBay if it wants to do business over the next few years. eBay has invested $500 million in Flipkart and holds a 5 per cent stake in the company.

Under the deal, Flipkart is allowed to sell merchandise from certain merchants at eBay for four years. Walmart, which has competing merchants in the same category, will have to either wait for four years or negotiate with eBay. Sources said the talks might happen over the next few days.

The top brass from Walmart, eBay, Tiger Global, and SoftBank Group have had discussions on valuation and ironing out kinks in the deal.

Talks have been on between Walmart and SoftBank over Flipkart's final valuation with the Japanese telecom major asking for almost a billion dollars more. Sources said it had delayed the signing of the term sheet. They added Walmart was supposed to sign the dotted line almost  10 days back, soon after it had completed its due-diligence.

"While Walmart is valuing Flipkart at close to $20 billion, SoftBank values Flipkart at over $21 billion. This would make the value of the primary as well as secondary shares higher, which would benefit SoftBank," said a source. SoftBank said it does not comment on speculations. 

Walmart is planning to pick up around 55 per cent stake in Flipkart through a mix of primary and secondary stake sale, paying $8 -$10 billion. SoftBank Group last year had invested over $2.5 billion in Flipkart for around 20 per cent stake in the firm. SoftBank called it speculation and refused to comment on the developments. 

However, industry insiders said negotiations were on and the deal might happen over the next few weeks. Sources said Flipkart founders Sachin and Binny Bansal, investors Tiger Global, and other investors were in favour of a deal with Walmart.

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