The Competition Commission of India (CCI) cleared the acquisition of India e-commerce major Flipkart by the United States-based retail behemoth Walmart. The approval from the competition watchdog clears the path for the biggest FDI deal in the history of Indian corporate sector. Back in May, Walmart had announced acquisition of 77 per cent stake in Flipkart in lieu of $16 billion. Once the deal is complete, the 11-year old Indian e-commerce firm will be valued at $20.8 billion.
In a tweet on Wednesdy, the CCI stated that it has cleared the Flipkart-Walmart deal. "@CCI_India approves proposed acquisition of Flipkart Private Limited by Wal-Mart International Holdings, Inc," the regulator said in a tweet.
Walmart had applied for the approval on May 19, after it announced the acquisition of Flipkart, its biggest so far. The CCI, which keeps an eye on unfair business practises in the market, needed to ascertain whether the deal between Flipkart and Walmart threatened the retail scenario in India. Seeking its approval, Walmart had assured the CCI that the deal will not lead to any competition complications and the pecking order of the Indian retail sector will remain unaffected.
@CCI_India approves proposed acquisition of Flipkart Private Limited by Wal-Mart International Holdings, Inc- CCI (@CCI_India) August 8, 2018
The approval is likely to draw flak from retailer bodies who have been vocally opposing the deal, on grounds that the resultant entity will eat into the market of small retailers. Retailers outfits are even willing take the matter of court in the event of the government not stopping this deal. In contrast, Walmart has maintained that the deal will ultimately benefit the small traders and farmers, and will create employment.
At the beginning of this week, Walmart had announced that it will hire 1,000 professionals for handling the technical aspect of its venture in India. It is mostly to hold off competition from e-commerce giant Amazon. This announcement came days after the US retail giant said that it will generate at least 30,000 direct and indirect jobs by establishing 15 wholesale Cash and Carry stores across Uttar Pradesh.
Edited by Vivek Punj