USA – Walmart, the American multinational retail corporation is likely to close a deal to acquire majority stake in the Indian ecommerce company, Flipkart by June in what ET Retail reports could be the biggest acquisition of an online business by the retailer.

Walmart is stepping up its online business against Amazon, which Bloomberg reports was also eying the online market in India, having preferred to acquire a significant stake in Flipkart.

According to some sources, Amazon has reportedly proposed to offer a high breakup fee for Flipkart, but Flipkart hinted that since Amazon had already an online presence in India, any deal with it would run into regulatory hurdles.

ET Retail quoted that sources said that a combination with Amazon would have more than 70% of India’s online retail market.

Amazon is not only embarking on online delivery but is also expanding its offline business, taking up US$27.6 million stake in Indian retailer Shopper’s Stop Ltd.

Walmart has been upscaling against Amazon especially after the acquisition of Whole Foods for US$13.7 billion, with technology on a number of fronts including partnership with Uber.

The US retailer is said to have completed its due diligence and made proposal to acquire 51% or more in Flipkart for between US$10-12 billion, including both existing and new shares expected to value the company for at least US$18 billion.

If a deal is reached, Walmart will acquire entire stakes owned by Tiger Global, Accel and Naspers, while Japan SoftBank Group which owns about one-fifth of Flipkart is unlikely to sell any of its shares, having indicated that the price being offered was low.

For Walmart, together with its world-class chains of hypermarkets, discount department stores, and grocery stores, a deal with Flipkart opens up retail opportunities in the promising Indian ecommerce market which will be worth $200 billion in a decade.

Flipkart is a good fit for Walmart, which has been trying to penetrate the Indian market, restrained with restrictions on foreign investment.

While Walmart operates 21 stores as wholesale businesses, Flipkart controls nearly 40% of India’s online retail market, according to a report by Forrester, an American market research company.

Walmart’s collaboration with Flipkart provides the online store with experience in retailing, logistics and supply chain management in addition to funds in an online scramble against Amazon.