Walmart Eyes Stake In Tata Group’s ‘Super App’ For $20-25 Billion; Here's How Will It Aid Both Entities

Walmart-Tata Group deal: If the deal goes through it will emerge as the largest deal in the retail space surpassing the Walmart’s purchase in 2018 of a 66% stake in Flipkart

(Representative Image/ Getty)

Mumbai: After reports emerged that Reliance Industries is trying to strike a deal with the US American retail giant Amazon for selling its stake in the retail subsidiary, there are news of Walmart Inc. in discussions with the Tata group for a large stake purchase in the proposed super app of the group. As per the reports in business Mint, the Indian conglomerate is in discussion with the retail behemoth for a strategic investment by Walmart in the super app platform business. The investment is likely to entail $20-25 billion investment for a stake in the proposed super app to be hosted under a Tata Sons subsidiary. If the deal goes through it will emerge as the largest deal in the retail space surpassing the Walmart’s purchase in 2018 of a 66% stake in Flipkart for $16 billion. With regard to the current dialogue between Tata and Walmart, the super app may be launched as a joint venture between Tata and Walmart that will help both companies leverage the synergies between Tata’s e-commerce business and Flipkart. As per the report, the valuation of the super app is estimated at around $50 -60 billion. Meanwhile Bloomberg News reported Tata Group is in discussions with potential investors about stakes in the new digital platform. What are strengths of Tata Group’s businesses? In comparison to Jio Platforms or Amazon, Tata group accounts for the largest franchise of retailing its own branded products to customers. It e-commerce business comprises of Tata Cliq, StarQuik, Tata Sky, and Croma. The promoter entity of the super app business will have all the retail businesses of Tata group merged into one channel. The biggest Indian conglomerate’s decision to build the 'all-in-one' e-commerce app is aimed at taking on the e-commerce players such as Amazon and Reliance which is also trying to aggressively expand its portfolio of products. How will the deal help both entities? Walmart is eyeing to associate with a reputed brand backing its e-commerce business, while Tata group will get a backing by a global name that will help in boosting sales of products through the group’s retail subsidiaries and online platforms. It will also help to compete against its competitors in the space including Reliance Industries’ Jio Platforms and Amazon. As per the Mint report,  the super app may include Flipkart’s offerings from Walmart besides bringing the entire retail product franchise under the Tata group on one platform. Goldman Sachs has been appointed as the investment banker by Walmart for the proposed transaction, one of the people said on condition of anonymity.