Walmart likely to reach deal to buy Flipkart by June-end

US retail major Walmart is in discussion with Flipkart to buy a majority stake in the Indian e-commerce company, and reach a deal by the end of June, according to sources close to the development.

The deal is expected to value the Indian e-commerce firm at about $20 billion.

Walmart completed its due diligence on Flipkart and had made a proposal to buy 51 per cent or more of the Indian company for between $10 billion to $12 billion.

The deal, which is likely to be carried out in tranches, will include purchase of primary and secondary shares, the sources said.

Walmart is in talks to buy shares from Flipkart and its investors. The contours of the deal, which is yet to reach a conclusive stage, are still being worked out.

The sources declined to be identified as the matters are private. Early investors like Tiger Global could look at a complete exit from the ecommerce company post the transaction, they said.

Flipkart declined to comment, while a response could not be elicited from Tiger Global. A deal with Flipkart would step up Walmart’s battle with Amazon.com for a bigger share of India’s fledgling e-commerce market.

Last year, SoftBank Vision Fund had pumped in an estimated $2.5 billion in Flipkart. The Bengaluru-based firm had also raised funds from eBay, Tencent Holdings and Microsoft Corp last year.

The deal, if it goes through, would unlock the booming Indian e-commerce market for the world's largest offline retailer. For Flipkart, it would provide more arsenal to go up against rival, Amazon in the Indian market.

Amazon and Flipkart are locked in an intense battle for leadership in the Indian market and have pumped in billions of dollars towards marketing and setting up infrastructure in the country.