SoftBank agrees to sell 21% stake in Flipkart to Walmart

SoftBank has agreed to sell its entire 21 percent stake in Flipkart to US-based retail giant Walmart, according to a report by The Economic Times.

The decision puts an end to weeks of uncertainty that had prevailed because SoftBank said it was still to decide whether or not to sell its stake.

The stake was bought in August 2017 for around $2.5 billion through the holding company's Vision Fund, after it failed to orchestrate a merger with Snapdeal.

Moneycontrol could not independently verify the report.

The Masayoshi Son-led company had been in talks to retain its stake in Flipkart, and had also considered delaying the sale due to tax issues pertaining to short-term capital gains and Vision Fund’s registration in Jersey, which does not have a tax treaty with India, the report suggests.

On Monday, it was reported that Alphabet, the holding company of tech giant Google, is yet to make a decision on acquiring a minority stake in Flipkart. The company is reportedly still considering the pros and cons of the deal.

Earlier this month, Walmart announced that it would buy 77 percent of online retailer Flipkart for $6 billion, as it made an elephant-footed entry into India's e-commerce market.

The remainder of the business will be held by some of Flipkart's existing shareholders, including co-founder Binny Bansal, Tencent Holdings, Tiger Global Management and Microsoft.

Walmart's foray into India's online retail space set the stage for an American business war against Amazon.com in the world's fifth largest economy.

Walmart has also approached fair trade regulator Competition Commission of India (CCI) for approval of its proposed acquisition of a majority stake in e-commerce major Flipkart, saying the deal does not raise any competition concerns.

Stating that the proposed acquisition would be done through its subsidiary Wal-Mart International Holdings, Walmart told the regulator that Flipkart is a Singapore-based investment holding firm, which along with its direct and indirect subsidiaries, both in India and elsewhere, is primarily engaged in the business of wholesale cash and carry of goods and providing marketplace-based e-commerce platforms to facilitate trade between customers and sellers in India.