American retail giant Walmart is in talks with Tata Group for a stake purchase in the proposed digital platform of the conglomerate, according to a report by Mint quoting sources. Tata's ‘super app’ intends to create a multi-faceted digital services platform offering a variety of products in the retail space.
“Tata Group is in talks with Walmart for a deal entailing a strategic investment by Walmart in the super app platform business. The Walmart investment could touch $20-25 billion eventually for a large stake in the proposed super app to be hosted under a Tata Sons subsidiary," a source told the publication on condition of anonymity.
If the deal comes to fruition, it will be India’s biggest retail space deal, overshadowing Walmart’s purchase of a 66% stake in Flipkart in May 2018 for $16 billion.
According to the talks between Tata and Walmart, the 'super app' could be a joint venture between the two behemoth companies, which would be beneficial to leverage synergies between Tata's ecommerce business and Flipkart, as per the report.
Walmart has appointed Goldman Sachs as the investment banker for the proposed deal, one of the sources told the publication. “The valuation of the super app is estimated at around $50-60 billion," said the second person.
The digital platform is scheduled to be launched in India around the end of 2020 or early 2021 and will bring together Tata's consumer businesses such as food and grocery, healthcare, insurance, financial services, fashion, electronics, OTTs among other services.
“Walmart is keen to get a strong brand backing its ecommerce business, while Tata Group wants a global name and an established player in the online space to boost sales of products currently sold through Tata Group’s retail subsidiaries and online platforms to be able to compete against Reliance Industries’ Jio Platforms and Amazon," another source told the publication.