Underscores long-term commitment to India,
where companies serve customers, support job creation, small
businesses, farmers and women entrepreneurs
Partnership to leverage combined synergies,
including market insights, retail expertise and local and global
supply-chain knowledge
Walmart Inc. (NYSE: WMT) and Flipkart Group (“Flipkart”) today
announced the closing of the agreements for Walmart to become the
largest shareholder in the Flipkart Group.
“Walmart and Flipkart will achieve more together than each of us
could accomplish separately to contribute to the economic growth of
India, creating a strong local business powered by Walmart,” said
Judith McKenna, president and CEO of Walmart International. “Our
investment will benefit India by providing quality, affordable
goods for customers, while creating new skilled jobs and
opportunities for suppliers. As a company, we are transforming
globally to make life even easier for customers, and we are
delighted to learn from, contribute to and work with Flipkart to
grow in India, one of the fastest-growing and most attractive
retail markets in world.”
“We are poised and ready to deliver the full value of this
partnership for India,” said Binny Bansal, Flipkart’s co-founder
and group chief executive officer. "By combining Walmart’s
omni-channel retail expertise, supply-chain knowledge and financial
strength with Flipkart’s talent, technology and local insights, we
are confident that together we can drive the next wave of retail in
India.”
The Flipkart investment transforms Walmart’s position in a
country with more than 1.3 billion people, strong GDP growth, a
growing middle class and significant runway for smartphone,
internet and eCommerce penetration. As Walmart scales in India, the
company will continue to partner to create sustained economic
growth across agriculture, food and retail. Future investments by
Walmart will support national initiatives and will bring
sustainable benefits in jobs creation, supporting small businesses,
supporting farmers and supply chain development and reducing food
waste.
Structure and Financial Details
Flipkart’s existing management team will continue to lead the
business. Tencent Holdings Limited and Tiger Global Management LLC
will remain represented on the Flipkart board, in addition to
independent board members, and will be joined by new members from
Walmart. The board will work to maintain Flipkart’s core values and
entrepreneurial spirit, while ensuring it has strategic and
competitive advantages.
With the completion of the investment, Walmart now holds
approximately 77 percent of Flipkart. The remainder of the business
is held by other shareholders, including Flipkart co-founder Binny
Bansal, Tencent, Tiger Global and Microsoft Corp. Moving forward,
Flipkart’s financials will be reported as part of Walmart’s
International business segment.
Walmart’s investment includes $2 billion of new equity funding
to help accelerate the growth of the Flipkart business. Both
companies will retain their unique brands and operating structures
in India.
Guidance
At the time the company disclosed the transaction, the estimated
impact to FY19 EPS was a negative $0.25-$0.30 assuming the
transaction closed mid-year. Consistent with guidance at the time
of its second quarter earnings report, the company anticipates this
level of EPS impact, prorated for today’s close date.
In FY20, as we look to accelerate growth in this important
market, Walmart continues to anticipate a headwind to EPS of around
$0.60.
About Walmart
Walmart Inc. (NYSE: WMT) helps people around the world save
money and live better - anytime and anywhere - in retail stores,
online, and through their mobile devices. Each week, nearly 265
million customers and members visit our more than 11,200 stores
under 55 banners in 27 countries and eCommerce websites. With
fiscal year 2018 revenue of $500.3 billion, Walmart employs
approximately 2.2 million associates worldwide. Walmart continues
to be a leader in sustainability, corporate philanthropy and
employment opportunity. Additional information about Walmart can be
found by visiting http://corporate.walmart.com, on Facebook at
http://facebook.com/walmartand on Twitter at
http://twitter.com/walmart.
About Flipkart
The Flipkart Group is one of India’s largest e-commerce
marketplace and includes group companies Flipkart, Myntra, Jabong,
and PhonePe.
Launched in 2007, Flipkart has enabled millions of customers,
sellers, merchants, and small businesses to be a part of India's
e-commerce revolution, offering over 80 million products across 80+
categories. Flipkart is known for pioneering industry-first
innovations such as Cash on Delivery, No Cost EMI and easy returns
– customer-centric services that have made online shopping more
accessible and affordable for millions of customers. Together with
Myntra and Jabong, which hold prominent positions in the online
fashion market, and PhonePe, India’s first UPI based payment app,
the Flipkart Group has steered the transformation of commerce in
India.
Forward Looking Statements
The statements in this press release regarding the impact of
this investment, including management’s guidance regarding the
earnings per share impact of this investment for the fiscal year
ending January 31, 2019, and the subsequent fiscal year and as to
the future operations of Flipkart and Walmart in India, are
believed to be “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995, as amended
(the “Act”), that are intended to enjoy the protection of the safe
harbor for forward-looking statements provided by the Act.
Walmart's actual results may differ materially from the guidance
provided as a result of changes in circumstances, assumptions not
being realized or other risks, uncertainties and other factors,
including: the level of Walmart’s investment in Flipkart from time
to time; currency exchange rate fluctuations; competitive pressures
and other economic, geo-political, capital markets and business
conditions, trends and events in India; changes in existing rules
and regulations regarding foreign direct investment in the retail
business in India; other changes in existing tax, labor or other
law or regulations in India; and other risks, uncertainties and
factors relating to Walmart’s operations and financial performance
discussed in its filings with the SEC. You should read this press
release in conjunction with our Annual Report on Form 10-K for the
year ended January 31, 2018, and our subsequently filed Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. You should
consider all of the risks, uncertainties and other factors
identified in those SEC reports carefully when evaluating the
forward-looking statements in this press release. Walmart cannot
assure you that the future results reflected in or implied by any
such forward-looking statement will be realized or, even if
substantially realized, will have the forecasted or expected
consequences and effects for or on our operations or financial
performance. Such forward-looking statements are made as of the
date of this release, and Walmart undertakes no obligation to
update such statements to reflect subsequent events or
circumstances.
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Walmart Inc.Marilee McInnis, International Corporate
Affairs, Global Communication+1 479-204-5099 Office800-331-0085
Media hotlinemarilee.mcinnis@walmart.comorMediaWalmart Media RelationsU.S.:
1-800-331-0085India:
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Media RelationsIndia: +91
9821176371media@flipkart.comorWalmart
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