May 28, 2018 / 11:39 AM / 4 months ago

Indian trader group objects to Walmart-Flipkart deal

MUMBAI (Reuters) - An Indian trader body has raised objections to Walmart Inc’s $16 billion acquisition of e-commerce firm Flipkart, though lawyers and sources said the complaint to the country’s antitrust regulator is unlikely to threaten the deal.

FILE PHOTO: A Common myna sits next to the logo of India's e-commerce firm Flipkart installed on the company's office in Bengaluru, India April 12, 2018. REUTERS/Abhishek N. Chinnappa/File Photo

The Confederation of All India Traders (CAIT) filed an objection to the U.S. retail giant’s buyout of roughly 77 percent of Bengaluru-based Flipkart, the body said on Monday, adding that the deal would create unfair competition and result in predatory pricing.

However, multiple sources close to the deal said that CAIT’s filing with the Competition Commission of India (CCI) did not pose a challenge to the acquisition.

FILE PHOTO: The Walmart logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 1, 2018. REUTERS/Brendan McDermid/File Photo

“It’s very unlikely the CCI will look into this complaint as both Flipkart and Walmart are not competing in India in relation to any products or services,” said a lawyer with knowledge of the deal.

A source with direct knowledge of the deal said the CAIT complaint was “not a matter of concern”.

Walmart’s bid is at aimed at competing with arch rival Amazon.com Inc in a major growth market and prompted protests from Indian trade and nationalist groups that say small traders will suffer.

Amazon’s presence in India means that a Walmart-Flipkart alliance would not be a threat to competition, a CCI official said. However, the deal could be politically sensitive because it might affect small and medium-sized traders, added the official, who declined to be named because he is not authorised to speak to the media.

M. M. Sharma, head of competition law and policy at law firm Vaish Associates, said: “Blocking (of the deal) is highly unlikely, but the CCI will keep checks and balances so that competition in the market is maintained.”

Reporting by Sankalp Phartiyal, Aditya Kalra and Abhirup Roy; Editing by David Goodman

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