Walmart may take India’s Flipkart public in as early as four years

Vastavam web: Walmart Inc said on Saturday in a filing with a U.S. regulator that it may take India’s Flipkart public in as early as four years, detailing for the first time a potential listing timeline for Walmart’s largest-ever acquisition.Minority investors holding 60 percent of Flipkart’s shares “acting together, may require Flipkart to effect an initial public offering” (IPO) four years after the close of the Walmart-Flipkart transaction, the Bentonville, Arkansas-based retailer said in a May 11 filing with the U.S. Securities and Exchange Commission.Walmart announced earlier this week that it will pay $16 billion for a roughly 77 percent stake in Flipkart in what is the U.S. retail giant’s largest-ever deal and a move to take on arch rival Amazon.com Inc in a key growth market.

The investment implies a valuation of nearly $21 billion for Bengaluru-headquartered Flipkart.Minority shareholders after the deal include co-founder Binny Bansal, China’s Tencent Holdings, U.S. hedge fund Tiger Global Management and Microsoft Corp.As part of the deal, Walmart will initially appoint five directors to Flipkart’s board, two directors will be named by minority shareholders while Bansal will take one board seat, according to the filing.

Walmart said it may, in future, appoint a sixth board member with the approval of the majority of the Flipkart directors.It also said it could appoint or replace Flipkart’s chief executive and other key executives of group companies in consultation with Bansal and the board.Walmart or its units could ask Flipkart to issue new ordinary shares of up to $3 billion before the close of the “transactions and on or before the first anniversary of the closing”, it said.

That deal could be sealed before the close of the Walmart-Flipkart transaction or immediately after, a source told, declining to be named as the talks are private.Walmart also said no party would be liable to pay a termination fee if a share issuance or purchase agreement with Flipkart were terminated.