Walmart Is Still Awaiting The Approval Of The CCI On The Flipkart Deal; CAIT To Stage Dharnas Across 1,000 Places Today
After announcing the acquisition of Indian ecommerce company Flipkart, global retail giant Walmart has been busy arranging funds for the deal. New reports revealed that the US giant has set a target for June 7, 2019, to complete the process of arranging funds for the Flipkart deal through a bond sale.
Meanwhile, the Confederation of All India Traders, which has asked the government to stop the deal, earlier announced it would hold dharnas at 1,000 places across the country today.
At present, the stakeholders of the Walmart-Flipkart deal, reported to be the biggest ecommerce deal in the world to date, have been addressing competition concerns raised by the Competition Commission of India.
The documents filed for a mega bond issue to finance the transaction revealed that a March 9, 2019 deadline had been set in the share purchase agreement between the two companies around which the termination rights have been negotiated.
It was in June that Walmart started the process of selling $16 Bn worth bonds (offering fixed and floating rate notes in nine parts) to complete its 77% acquisition of Flipkart.
Walmart had earlier claimed that it would close the deal by the end of 2018.
Reiterating this, a Walmart spokesperson said: “Walmart is working with the authorities in India and we are hopeful of timely approval. We are still expecting closing later this calendar year, subject to regulatory approval. The date in the 8-K filing on June 21, 2018, is related specifically to the bonds we recently issued.”
In a written submission for approval for the deal, Walmart tried to address the CCI’s concerns by saying that the relevant market for the proposed transaction is the pan-India market for B2B sales.
The deal has been evoked protests and criticism from various quarters, with the most vociferous ones being from traders’ bodies.
The CAIT had threatened a nationwide agitation if the government cleared the Walmart-Flipkart deal.
It must be noted that the Indian government has already set up an ecommerce think tank to take proactive action on issues related to the $200 Bn worth ecommerce market. However, the think tank is yet to make any significant announcements in this regard.
[The development was reported by ET.]