Tag: amazon

Flipkart turns into private firm for buyout by Walmart

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

India’s e-tailer major Flipkart has turned into a private company from a holding firm, ostensibly for a strategic buyout soon by the world’s largest retail giant Walmart Inc, according to documents it filed for regulatory approvals.

“Documents filed by Flipkart with the Singapore’s Accounting and Corporate Regulatory Authority (ACRA) indicate that the holding company has become a private firm – Flipkart Pte Ltd in Singapore where it is registered,” business intelligence platform Paper.vc Founder Vivek Durai told IANS on Friday.

In a regulatory filing with ACRA on Thursday, the city-based e-commerce behemoth said it concluded a second buyback of shares from a set of its investors for $350.46 million in a transaction that closed on April 27.

“The buyback and the subsequent conversion to private company status appear to be part of a series of steps aimed at easing a proposed acquisition by Walmart,” Chennai-based Durai said.

Though the buyback was on April 27, Flipkart filed the documents on May 3. It has obviously paid from the $2.5-billion funds it raised from Soft Bank Vision Fund, Microsoft, E-Bay and other investors last year.

“The buyback will enable the e-commerce giant to bargain for a favourable deal with the US-based Walmart, which is eyeing a majority or controlling equity stake in it to foray into the multi-billion-dollar Indian retail space,” a market analyst told IANS earlier.

The e-commerce major purchased 18,95,574 redeemable preference shares and 1,74,319 non-redeemable preference shares for $350.46 million from a set of investors in a transaction that closed on April 27.

The decade-old firm’s first buyback of shares was on December 7, 2017 when it spent a whopping $869.15 million to buy 72,83,175 redeemable preference shares and 23,01,456 non-redeemable preference shares at $85.3 per share.

“As the company needs to have 50 shareholders to become a private entity, 94 of the 144 shareholders would have exited in the twin buyback rounds, while the remaining, would have partially (15-50%) sold their equity stake,” hinted Durai.

According to another analyst who declined to be named, Flipkart has converted into a private firm so that Walmart could come on board as a strategic investor for controlling stake after the exit of so many institutional and individual investors.

“The deal between Flipkart and Walmart is a done thing, as evident from the exit of majority of its investors. There is no reason otherwise for it to turn into a private firm after being a holding company over a decade,” hinted the analyst.

“Walmart has been losing ground to Amazon in their traditional US market, while Flipkart in India has managed to maintain its lead, albeit slender, over Amazon. It’s not surprising that Walmart wants to take over Flipkart, which has built an exceptional engineering talent at many levels of operations,” affirmed Durai.

“Flipkart, which raised $6.11 billion in 18 rounds of funding since 2009 and bought back over 26 lakh shares worth $1,320 million ($1.32 billion) places its valuation at $17.69 billion,” said Durai.

The valuation is based on the buyback price the holding firm paid to investors, including premium.

With institutional investors holding majority of the combined stake, ranging between 20.79% (highest) by Soft Bank and 6.11 per cent by E-Bay (lowest), the share of co-founders Sachin Bansal and Binny Bansal is 5.5% and 5.25%.

According to the filings, the company also bought shares from its present and former employees on December 13, 2017 for $100 million that were given as stock options.

Of the major institutional investors and venture partners, besides Soft Bank, Tiger Global has 20.55% stake, Nasper 12.83%, Accel Partners 6.44% and Tencent 5.69% among others.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Flipkart yet to finalise stake sale deal with Walmart

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Indian e-commerce firm Flipkart’s board is yet to finalise a deal to sell a controlling stake to Walmart Inc, two sources with direct knowledge of the matter said on Friday, adding a deal could just be days away.

Bloomberg reported earlier on Friday, citing unidentified sources, that Flipkart’s board had approved a deal to sell a stake of about 75% in the company to a group led by US retail giant Walmart for about $15 billion.

A third source told Reuters that while Flipkart’s board had “in-principle” approved engaging with Walmart based on the terms of an offer before them, taxation-related concerns and a few other issues need to be resolved.

The first two sources said Alphabet Inc is also likely to invest in Flipkart alongside Walmart, but terms of the deal may change. Japan’s SoftBank Group, the biggest investor in the Indian firm through its private equity fund, is considering selling its roughly 20% stake as part of the deal if the price is right, two other sources said.

“SoftBank does not like to be a passive investor,” one of the sources said.

Reuters had previously reported Walmart was in advanced talks with Flipkart to acquire a controlling stake in the Bengaluru-based online marketplace at a valuation of at least $18 billion.

Flipkart has bought back $350 million worth of shares from its investors as it seeks to convert its Singapore-incorporated company to a private limited firm, in a move that could ease the way in for a new strategic investor, regulatory filings show.

Flipkart and Alphabet did not respond to Reuters’ requests seeking comment. Walmart and SoftBank declined to comment.

AMAZON OFFER

Earlier this week, Indian TV channel CNBC-TV18 reported Amazon Inc had made a formal offer to buy 60% of Flipkart and that it had also proposed a $2 billion breakup fee to convince Flipkart to discuss its offer.

Sources told Reuters that Amazon had shown an interest in buying Flipkart, but said a deal with Walmart was much more likely to go through. Amazon is Flipkart’s biggest rival in India.

Amazon’s move to bid for Flipkart may push up valuations of the Indian firm, but engaging with the tech giant could be fraught with risks for Flipkart, said industry insiders and lawyers.

Beyond the risk of opening its books for due diligence and exposing sensitive commercial agreements to its biggest rival in India, an Amazon-Flipkart combination could face significant antitrust hurdles, they said.

Amazon is currently seeking legal opinion to understand how the country’s antitrust regulator, the Competition Commission of India (CCI), is likely to view any deal with Flipkart, a lawyer and an industry source familiar with the matter told Reuters.

A former senior CCI official said e-commerce firms were already giving deep discounts and an Amazon-Flipkart union was likely to be in a position to sway the market their way, but the CCI could be convinced to approve a deal if both firms suggested “innovations or remedies.”

“This definitely would be a tricky case and not easy to sail through,” he added.

Flipkart, together with its fashion units Myntra and Jabong, controls nearly 40 percent of India’s online retail market, while Amazon is a close second with a 31% share, according to data from research firm Forrester.

Both Amazon and Flipkart are pouring billions of dollars into winning shoppers in the fast-growing market that is expected to be worth $200 billion within a decade.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Flipkart founder Sachin Bansal could exit if Walmart deal goes through, says report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Flipkart’s Executive Chairman Sachin Bansal may exit the Bengaluru-based company he set up over a decade ago if negotiations with the US retail giant Walmart reach a successful conclusion, the Economic Times said, quoting sources.

The daily, quoting sources, said Bansal did not have any plans to sell his stake until last week, and was seeking a bigger role in the company.

Bansal could also look to launch a startup again and mentor other entrepreneurs, the daily added.

“The talks around Sachin moving out of Flipkart with the Walmart deal have started in the last 3-4 days,” ET quoted sources as saying.

The final decision on Bansal’s exit from Flipkart could be decided over the next week as Flipkart and Walmart finalise negotiations for the board seats. Bansal’s exit was a strong possibility, the daily added.

Flipkart’s 10-member board includes Sachin and Binny,  while Kalyan is not on the board, according to regulatory filings made by the company in Singapore.

Bansal told ET that he wouldn’t be able to comment on the issue via text message.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Flipkart buys back shares worth $350 million

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Indian online marketplace Flipkart has bought back $350 million worth of shares from its investors as it seeks to convert its Singapore-incorporated company to a private limited firm, in a move that could ease the way in for a new strategic investor.

US retail giant Walmart Inc is in advanced talks with Flipkart to acquire a controlling stake of more than 51% in the Bengaluru-based e-commerce firm at a valuation of at least $18 billion, sources previously told Reuters.

Flipkart Ltd purchased shares for $350.5 million from some of its investors including Tiger Global and Accel, according to May 3 regulatory filings from Singapore’s Accounting and Corporate Regulatory Authority, sourced by business intelligence platform paper.vc.

It also began the process of converting Flipkart to a private limited company, changing its name to Flipkart Pte Ltd, the filings showed.

Stakeholders in a private limited company are usually bound by a contract and have more flexibility than in a public company.

“Typically strategic investors don’t like to deal with multiple shareholders because it just becomes more cumbersome,” a senior lawyer told Reuters. “So they very often ask companies to clean up the cap table or consolidate small shareholders.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why it is wrong to exclude foreign companies from e-commerce policy

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The ministry of commerce and industry has announced the constitution of a think-tank which has been tasked with the responsibility of arriving at a National e-commerce policy in six months.

Ecommerce has had a transformative impact on consumers and businesses. It is also an area where the regulatory framework governing e-commerce transactions, practically all over the world, is playing catch-up with the growth of technology and economic practices. The government’s initiative therefore presents an opportunity to frame a facilitative framework to address issues facing ecommerce services providers, as well as concerns of consumers.

Segregating “Indian” and “Foreign”

It is in this context that the government’s exclusion of key players such as Amazon, Facebook, Google and Uber from the think-tank is a cause for concern. The underlying assumption appears to be that Flipkart, Snapdeal, Ola and Paytm are ‘homegrown’ since their promoters are of Indian origin and have a rightful place in the task force whereas the multinationals need to be kept out.

Read: Exclusive: Amazon offers to buy 60 percent in Flipkart

This simplistic assumption, however, belies the fact that in an increasingly globalised and interconnected world, and with a fairly liberalised FDI regime for e-commerce in India based on the marketplace model, the lines are blurred between what are ‘domestic’ and ‘foreign controlled’. Amazon India is an Indian company, and a 100% subsidiary of the US-based Amazon. Flipkart has a complex structure, which can all be traced to the ultimate holding company in Singapore — Flipkart Private Limited, which has investments in Flipkart’s Indian subsidiaries. The Indian-origin promoters of Flipkart, the Bansal brothers, have less than 20% stake in Flipkart and significant shareholding in Flipkart until recently was vested with the American investment company Tiger Global, and China’s Tencent Holdings.

Recently, tech investor Softbank of Japan acquired one-fifth of Flipkart’s shareholding for $2.5 billion, billed as the biggest private investment in India’s consumer technology sector. It is now known that both Walmart and Amazon have offered to acquire a stake in Flipkart, and whether the Bansals retain their shares after such acquisition, remains to be seen. Softbank also has stakes in other ecommerce entities in India, including Ola, Paytm and InMobi. China’s Alibaba and Ant Financial are reported to have over 40% shareholding in Paytm.

Read: Exclusive: Walmart keen on Flipkart’s IPO post acquisition

In this context, the country’s ecommerce policy necessarily needs to have the inputs from all players in the country’s ecommerce space. A nationality driven approach is misplaced, since there is truly no company in the Indian ecommerce space owned/controlled by Indian nationals. It will also not serve any purpose because the growth pattern of each of the companies reveals significance of global capital in sustaining innovation and entrepreneurship. An exclusionary approach at the stage of constituting a think-tank itself sends a wrong signal about what the government’s ultimate objective may be.

Regulation for Growth and Not Stifling Innovation

It is clear that the ecommerce think-tank will have several areas to think through and arrive at suggestions for effective regulation. The government’s has said the focus will be on physical and digital infrastructure, regulatory regime, taxation policy, data flows, server localisation, intellectual property rights protection, FDI, technology flows, skill development and trade-related aspects.

The tightrope walk in each of these areas is to ensure that the regulatory framework does not become excessive, and instead achieves the core objective of attracting investments and encouraging the growth of competition and innovation.

Globally, the main fear of the big technological giants has been their ability to penetrate markets with capital and potentially present entry barriers for new players. This needs to be addressed in a logical manner through the lens of competition law, rather than simply branding companies as good or bad based on nationality.

India’s current competition law is rooted in the principle that dominance in itself is not bad; it’s the abuse of dominance that needs to be checked. In the context of ecommerce and the digital economy, this essentially translates into ensuring that there is no abuse or unfair use of the key resource, i.e., data, and that the legal framework enables healthy competition.

A robust framework for facilitating growth of ecommerce will help India capitalise on the significant advantage that it already has in terms of availability of IT skills. On the other hand, excessive regulation, or an unduly protectionist approach to regulation will simply be counter-productive.

RV Anuradha is Partner, Clarus Law Associates, New Delhi, and specialises in international economic laws.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Exclusive: Walmart keen on Flipkart’s IPO post acquisition

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

US-based retail giant Walmart is keen on Indian e-commerce giant Flipkart’s initial public offering (IPO) post acquisition, said people familiar with the matter.

Walmart is likely to keep its cash and carry business separate from merged entity.

The company has given informal assurance to investors on Flipkart’s IPO, said the sources.

Walmart declined to comment on CNBC-TV18’s query and Flipkart is yet to respond on this.

Flipkart’s share holders, Tiger Global and Tencent, are likely to retain their small stake post IPO.

Earlier, CNBC-TV18 has reported that Amazon has emerged as new contender for Flipkart.

The global e-tailer has made a formal offer to buy a 60% stake in Flipkart on Monday.

Walmart’s IPO assurance to keep ‘like minded’ investors on board.

Walmart will also retain the management team of Flipkart including CEO Kalyan Krishnamurthy, said an earlier report by Live Mint a few days ago.

Walmart is also keen on continuing relations with Tencent, Tiger Global and Google.

Recently, Walmart and Tencent teamed up in China to take on Alibaba.

Google is also set to make a small investment in Flipkart as part of a multi-billion dollar deal.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Exclusive: Amazon offers to buy 60 percent in Flipkart

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Amazon has emerged as new contender for Indian e-commerce giant Flipkart. The global e-tailer has made a formal offer to buy a 60% stake in Flipkart on Monday,  sources said.

Amazon’s offer is likely to be on par with Walmart’s bid for the Indian company. The giant is also seeking a non-compete agreement with Flipkart’s founders, according to the sources.

The Amazon bid offers a breakup fee of $2 billion, while the Walmart offer includes the buyout of over 80% stake.

The company, helmed by billionaire Jeff Bezos, said it does not offer comments on rumours and speculations.

Walmart proposed to retain Flipkart’s current structure, while Amazon has made not such details known.

Walmart is expected to gain three to four seats on Flipkart’s ten-member board.

Walmart has said it will retain the management team of Flipkart including CEO Kalyan Krishnamurthy

The buzz of the $12 billion deal between Walmart and Flipkart recently got louder with Softbank approaching Walmart’s global CEO.

The e-commerce major’s investors and founders are in favour of the deal with Walmart, according to the sources.

The sources added that Sachin Bansal, founder of Flipkart,  was in the US last week to oversee final lap negotiations with Walmart.

The Walmart global team may come to India soon to close the deal.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

New Zealand plans ‘Amazon Tax’ for people buying online

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

New Zealand announced plans Tuesday to start taxing people who buy books, shoes and other small items online from abroad in a measure many people are calling the “Amazon Tax.”

Revenue Minister Stuart Nash said the government plans to close a loophole that allows people to buy low-cost items from abroad without paying the 15% tax imposed on goods sold in New Zealand stores. The new system would levy the same tax and must be approved by lawmakers. It would take effect from October 2019.

How to tax purchases from online companies like Amazon is a question vexing many countries. Australia plans to collect tax on low-cost items later this year while the European Union intends to start collecting such taxes by 2021.

“Small businesses such as bookshops have convincingly argued they are penalized by a system which is badly out of date,” Nash said. “It’s particularly difficult for very small shops outside the main centers.”

The current system allows consumers to buy goods worth up to 400 New Zealand dollars ($280) from international online retailers without having to pay tax. That was based on the idea that it would cost more for New Zealand agencies to collect small amounts of tax than it would generate in revenue.

But online sales have boomed, growing at an annual rate of about 18 percent in the past five years, which retailers say has taken a bite out of their businesses. Under the proposed plan, the onus would fall on companies like Amazon to impose and collect the tax.

New Zealand retailers have welcomed the plans.

Tilly Lloyd, the manager and co-owner of independent bookstore Unity Books Wellington, said customers who added life and vigor to the streets by shopping locally were effectively being penalized.

“It’s very symbolic for us, it’s a change that our street customers have been needing,” she said. “It’s an equity issue.”

New Zealand began charging a 15% tax on purchases of offshore digital services in 2016. Known as the “Netflix Tax,” the measure applies to things like music, films and e-books that are bought online and downloaded.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Amazon and Chetan Bhagat in a six book deal

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

India’s best-selling English author Chetan Bhagat has signed a multi-million dollar deal with Amazon Publishing for his next six books.

This deal makes Chetan Bhagat, the first Indian author to be signed by Amazon Publishing.

The global deal with Amazon Publishing includes three fiction and three non-fiction titles. The first title is expected to be a mass market or commercial fiction book and will be published in October 2018.

The deal will give the author of  Five Point Someone’s books not only a global reach but will a deeper penetration in tier two and tier three cities.

This deal ends his long association with Rupa & Co, which published his seven novels and two collections of essays over the last couple of years.

Amazon Publishing will publish these books globally in print, eBook and audio formats. Westland Publications, which is part of Amazon, will distribute the print editions in India.

Amazon had acquired Westland in January 2017. The books are also expected to be available in multiple languages to cater to the non-English speaking population.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

To beat porch thieves, Amazon slips packages in car trunks

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Not content to stop at slipping packages inside customers’ front doors, Amazon.com Inc on Tuesday started a new programme to deliver packages to its members’ parked cars.

The world’s largest online retailer is rolling the programme out in 37 US cities for customers with newer compatible vehicles and plans to expand the service. All that is required to have packages delivered to a car is downloading an app from Amazon and linking it to the vehicle’s so-called connected car service, such as General Motors Co’s OnStar system or Volvo AG’s On Call service.

The in-car delivery effort is part of Amazon‘s drive to leave packages where they cannot be easily stolen. Since 2011, Amazon has offered secure lockers for urban customers.

The in-car service builds on an effort Amazon launched last fall called Amazon Key. That system uses a $220 combination of an internet-connected door lock and camera to allow Amazon delivery drivers to place packages inside the homes of members of Amazon Prime. By contrast, the in-car delivery service is free for Prime members. It will be offered in San Francisco, Seattle, Atlanta, Nashville, Milwaukee, Salt Lake City, Washington, D.C. and other areas.

The in-home delivery option put Amazon in direct competition with so-called smart home security companies such as Alphabet Inc’s Nest Labs and presaged Amazon‘s $1 billion acquisition of connected doorbell maker Ring.

But the new in-car delivery service may have broader reach because it works with many compatible cars from Chevrolet, Buick, GMC, Cadillac and Volvo, with plans to deliver to more makes and models in the future.

In a statement, GM said there are at least 7 million owners of compatible GM models. Amazon has not disclosed how many customers have tried its Amazon Key in-home service.

In-car delivery also gives Amazon an in-between option for customers who might want a more secure delivery location than the front porch but do not want delivery people inside their homes.

The Amazon delivery service taps into the car‘s built-in unlock feature without ever giving the delivery person a pass code or other permanent access to the car.

“Everything is securely encrypted between the two services,” said Rohit Shrivastava, Amazon Key’s general manager.

Shrivastava also said that Amazon cannot see or track the customer’s car; instead, the customer gives Amazon an address where the car will be parked and publicly accessible, along with the make, model, colour and license plate number to help the delivery person find the right car. Customers also get several reminders on their phones before, during and after the packages are delivered.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow