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Walmart Closes Deal to Become 77% Shareholder in Flipkart, Expects Negative Impact on EPS From Deal

Walmart (WMT) said on Saturday it closed its deal to become the largest shareholder of Flipkart Group. Walmart now holds approximately 77% of Flipkart. The remainder of the business is held by other shareholders, including Flipkart co-founder Binny Bansal, Tencent, Tiger Global and Microsoft (MSFT), 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. Walmart noted it will get seats on Flipkart’s board.

It had anticipated a negative impact on FY19 EPS of $0.25-$0.30 based on a mid-year close. That will be prorated to the closing date.

In FY20, Walmart expects to accelerate growth in India, but noted that it continues to anticipate a headwind to EPS of around $0.60.