CCI gives nod to Walmart-Flipkart deal
As per a news source, the acquisition of Flipkart by Walmart has received a nod from the Competition Commission of India (CCI). The acquisition was announced three months back.
As CCI said, in the B2B sales, the two parties were not close competitors nor did they have a combined market share that could raise competition concern.
It also acknowledged segments such as skincare, haircare, apparel and accessories as some of the horizontal overlapping areas. But it noted the combined value of sale of the parties in this segment was low and relatively insignificant to the size of the markets for the said products.
Walmart will now subscribe to the ordinary shares issued by Flipkart for an aggregate purchase price of $2 billion in cash.
Bansal, Co-Founder & Executive Chairman, Flipkart, is expected to leave the firm by selling his 5.5% stake and Binny Bansal will be selling about 10% of 5.1%.
Presently, Walmart Group is present in India through its indirect wholly-owned subsidiary Walmart India. As per the Foreign Direct Investment (FDI) policy, Walmart India cannot engage in direct sales to consumers (B2C Sales).
CCI also touched upon the third-party concerns and representations made against the deal. Many of these concerns pertained to predatory practices and preferential treatment Flipkart provides to specific sellers on its platform. It, however, said none of these issues have any nexus to the competition dimension of the proposed deal.