Walmart Falls After $16B Flipkart Deal

Walmart Inc.’s deal to buy a controlling stake in India’s biggest online seller is meeting skepticism on Wall Street.

The world’s largest retailer will acquire a 77 percent holding in Flipkart Group for $16 billion, the companies said earlier Wednesday. Flipkart co-founder Binny Bansal and other shareholders will hold the remainder. The tie-up values the Indian e-commerce giant at about $20.8 billion and marks a blow against rival Amazon.com Inc. as the battle for e-commerce supremacy goes global.

The deal — Walmart’s biggest ever — gives it greater access to India’s e-commerce market, which Morgan Stanley has estimated will grow to $200 billion in about a decade from about $30 billion today. But it will take some time for the business to turn profitable, and analysts on a Wednesday morning call about the deal adopted a cautious tone. S&P Global Ratings changed its outlook on Walmart to negative.

To read the rest of the story, please go to: Bloomberg