The Competition Commission of India (CCI) has given the green light for Google parent company Alphabet to acquire a stake in ecommerce giant Flipkart.
Flipkart Deal comprise acquisition of minority investment
The watchdog stated that the proposed deal comprises the acquisition of a “minority, non-controlling investment” in Flipkart through subscription of shares. Additionally, the transaction will involve an arrangement between an affiliate of Google and a subsidiary of Flipkart for the “provision of additional cloud services”.
Continue Exploring: Tata Cliq reports 42% sales drop to INR 247 Cr, attributes decline to exit from electronics
This development comes six months after Flipkart announced that it had added Google to its cap table as a minority investor as part of a larger round led by its parent and retail giant Walmart. The deal was contingent on regulatory approvals and terms that both parties needed to agree upon. Flipkart raised a massive $1 Bn round earlier this year, with Walmart committing $600 Mn and Google reportedly contributing $350 Mn.
Alphabet raises premium to 5%-10%
Reportedly, the capital was raised at a 5%-10% premium to Flipkart’s last reported valuation of $33 Bn during the previous fundraise. Flipkart’s marketplace entity also received an infusion of INR 1,421 Cr from its Singapore parent in April 2024, which was preceded by another INR 924 Cr infusion earlier this year.
Continue Exploring: Meesho introduces voice bot Gen AI, expects 20% cost reduction
Meanwhile, the approval comes at a time when Flipkart has been on an expansion spree. Earlier this year, it forayed into the quick commerce segment with the launch of ‘Flipkart Minutes’ and has plans to rapidly scale up the offering. However, the company has also been facing renewed regulatory scrutiny.
In September this year, the CCI found Flipkart, along with Amazon, guilty of flouting antitrust rules by giving preference to certain sellers.
