US retail giant Walmart’s proposed acquisition of Indian e-retailer Flipkart has been approved by Competition Commission of India (CCI), the antitrust regulator of India.
A member bench of CCI in its 12-page order took note of concerns relating to deep discounting and preferential treatment to select sellers on the marketplace, adding that these “may merit examination from competition perspective” but are not relevant to approval of the deal.
“@CCI_India approves proposed acquisition of Flipkart Private Limited by Wal-Mart International Holdings, Inc,” tweeted the regulatory body.
The $16-billion acquisition deal was announced by Walmart Inc in May this year. 77 per cent stake of Flipkart was acquired by the retailer at USD $ 16 billion. The deal is touted as the biggest in the country’s corporate history.
The regulatory body gave its nod to the proposal after assessing that Walmart-Flipkart deal would not adversely impact competition in India and therefore, addibg that the deal satisfies terms of Section 31(1) of the Act. As per rule, CCI’s approval is needed for all merger acquisition deals above a threshold.
Flipkart’s online retail business in India operates primarily through two main entities — business to business (B2B) unit Flipkart India Pvt. Ltd and Flipkart Internet Pvt. Ltd, which runs the online platform Flipkart.com.
The Walmart-Flipkart deal has enraged a group of brick-and mortar retailers headed by the Confederation of All India Traders (CAIT), the leading advocate for small traders and retail businesses in India has termed CCI’s approval to Walmart-Flipkart deal unfortunate.
CAIT secretary general Praveen Khandelwal said. “We will move the Delhi High Court and even Supreme Court if needed against the decision of CCI.”
