Under the mega deal, USA retail giant Walmart will pick up 77 per cent stake in Flipkart Group holding company that is registered in Singapore for Dollars 16 billion and the transaction is subject to statutory approvals, including that of Competition Commission of India (CCI). They said the government should closely monitor each passage of the deal since it was not a merger of two companies but would have greater ramifications on the retail trade and economy. The first question: Why did the American retail giant Walmart decide to put $16 billion for a controlling stake in a loss-making ecommerce company Flipkart? The deal values the 11-year old Indian e-commerce firm at United States dollars 20.8 billion.
It added that its team of lawyers is studying the deal and very shortly, CAIT will move to appropriate authorities and seek legal recourse.
It's been a week since the world's largest M&A deal in the e-commerce space was struck, and curiosity around the transaction has only grown.
When contacted, Flipkart did not respond to emails.
"We believe that this partnership will be beneficial to all stakeholders and Walmart will continue to be an economic contributor".
While this is a major achievement for the e-commerce firm, which was encountering a period of sluggishness due to fierce competition, it would look to further consolidate its business now that it has the backing of Walmart.
CAIT National President B C Bhartia & Secretary General Praveen Khandelwal said that it's an open fact that Walmart is not an online Company and e Commerce is not its core competence area.
Mr Khandelwal said that key issues of the matter is whoever controls the platform control data and digital intelligence.
The e-commerce domain in India is expected to spice up starting 2019, when both Flipkart and Amazon would be dueling it out to increase their customer base. "Therefore, being the controller of the Company, Walmart may use the data and other information as per its will and wish and the possibility of compromising the data cannot be ruled out", alleged Khandelwal.
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