The bidding war for Indian ecommerce marketplace Flipkart continues to heat up, with Amazon making a formal bid for a 60% stake in the firm, according to CNBC.
The report said Amazon’s bid would likely be on par with an earlier one from rival Walmart. Amazon is also reportedly offering a $2 billion breakup fee should the deal fall through.
This comes just weeks after Walmart announced it was close to an agreement to buy a majority stake in Flipkart by the end of June. Reuters reported it would be Walmart’s biggest acquisition of an online business. The proposal from the world’s largest retailer was reportedly for a stake north of 51% valued between $10 billion and $12 billion.
India’s ecommerce market, which is estimated to be worth $200 billion over the next decade, has been hotly pursued in recent years by both Amazon and Walmart, without great success; thus, the intense interest in leading player Flipkart. Public and private initiatives to increase broadband internet access in India, as well as 7.2% GDP growth, have made the market even more desirable.
Forbes reported in April that an Amazon/Flipkart deal could face scrutiny from the Competition Commission of India over fears of an ecommerce monopoly.
Under Walmart’s plan it would buy both new and existing Flipkart shares, with existing shares valuing the company at $12 billion and future shares valuing it at a projected $18 billion.