Walmart Inc (WMT.N) will pay $16 billion for a roughly 77 percent stake in Indian e-commerce firm Flipkart, the U.S. retailer’s largest-ever deal, in an attempt to compete with rival Amazon.com Inc (AMZN.O) in a key growth market.
Shares of Walmart fell 4 percent in early trade as the company warned the deal would dent earnings. It expects the transaction to hurt fiscal 2019 earnings per share by 25 cents to 30 cents if the deal closes before the end of the second quarter.
“We will not know for 5-10 years whether this transaction is successful strategically or financially,” said Steven Roorda, portfolio manager with Minnesota-based Stonebridge Capital Advisors. “Walmart has a very poor track record operating outside North America,” he said.
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