If the deal works out, it will be the country’s largest deal in the retail space ever, after Walmart’s own May 2018 purchase of a 66% stake in Flipkart for $16 billion.
The salt-to-software conglomerate Tata group is in discussions with Walmart Inc. for a large stake in the proposed super app, two people aware of the developments said. Creating a digital services behemoth, offering a wide range of products in the retail space is among the prime focuses of the ‘super app’, Livemint reported.
“Tata group is in talks with Walmart for a deal entailing a strategic investment by Walmart in the super app platform business. The Walmart investment could touch $20-25 billion eventually for a large stake in the proposed super app to be hosted under a Tata Sons subsidiary,” one of the two persons said.
If the deal works out, it will be the country’s largest deal in the retail space ever, after Walmart’s own May 2018 purchase of a 66% stake in Flipkart for $16 billion.
The super app could be launched as a joint venture between Tata and Walmart, as per the ongoing discussions, which will enable leveraging on the synergies between Tata’s e-commerce business and Flipkart.
“The super app may include Flipkart’s offerings from Walmart and the entire retail product franchise housed by the Tata group on one platform for retail customers. And on the other hand, Flipkart could get to be powered by Tata,” the first person said.
The new digital platform business is proposed to be run by Tata-Walmart together, and there could be more foreign investors roped in as investors, the ongoing talks suggest.
One of the people, on condition of anonymity, said Goldman Sachs has been appointed as the investment banker by Walmart for the proposed transaction.
“The valuation of the superapp is estimated at around $50 -60 billion,” the second person informed.
“Walmart is keen to get a strong brand backing its e-commerce business, while Tata group wants a global name and an established player in the online space to boost sales of products currently sold through Tata group’s retail subsidiaries and online platforms to be able to compete against Reliance Industries’ Jio Platforms and Amazon,” the second person added.
Tata group, compared to Jio Platforms and Amazon, has the largest franchise of its own branded products that are sold to retail customers.
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