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Did Flipkart Reject Amazon’s Offer?

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Dec. 4 2020, Updated 10:53 a.m. ET

Google may acquire stake in Flipkart

Amazon (AMZN) had expressed interest in acquiring Flipkart to try to keep Walmart (WMT) away from India’s fast-growing online retail sector, according to media reports. But Flipkart chose to strike a deal with Walmart, which is buying 77% of Flipkart for $16 billion. Alphabet’s (GOOGL) Google may join Walmart’s investment in Flipkart.

Flipkart, whose share in India’s online retail market currently exceeds that of Amazon according to Forrester, was founded by former Amazon employees.

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Could Amazon turn to Snapdeal?

At one point last year, there was speculation that Flipkart was in talks to acquire its rival Snapdeal, which is backed by Alibaba (BABA). The talks ended without a deal, which leaves Snapdeal as a potential buyout target by Amazon if it wants to respond to Walmart’s acquisition of Flipkart with a deal of its own. Walmart is taking a long-term view with its Flipkart investment. Altaba (AABA), previously known as Yahoo, made an early bet on Alibaba, and that bet paid off in a big way when Alibaba went public about a decade later.

eBay (EBAY), which had sold its Indian subsidiary and brand to Flipkart, is expected to end its brand licensing arrangement with Flipkart as it prepares to re-launch its own e-commerce site in India.

Amazon-Flipkart deal may have raised antitrust questions

Although Flipkart may have rejected Amazon’s offer because Walmart’s offer was sweeter, a Flipkart-Amazon deal would have created competition concerns. Flipkart and Amazon dominate India’s e-commerce market.

Amazon is betting on fast-growing emerging markets like India and Brazil to grow its international business. Amazon’s international business grew 34% year-over-year and generated $14.9 billion in revenue in 1Q18. But Amazon lost $622 million through the international unit in the quarter.

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