Walmart and Flipkart Investment Presentation
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Transaction Overview and Financial Highlights
Transaction
Structure
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Financing and
EPS Impact
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Walmart's approximately $16 billion investment includes $2 billion of new equity funding, which will help Flipkart achieve
its growth potential.
Walmart initial ownership stake of approximately 77%.
Remainder of ownership held by Flipkart's existing shareholders, including Flipkart co-founder Binny Bansal, Tencent
Holdings Limited, Tiger Global Management LLC, and Microsoft Corp.
While the immediate focus will be on serving customers and growing the business, Walmart supports Flipkart's ambition
to transition into a publicly-listed, majority-owned subsidiary in the future.
Closing expected later in FY19, subject to regulatory approval.
Finance the investment with a combination of newly issued debt and cash on hand.
Flipkart's financials will be reported as part of Walmart's International business segment.
Assuming the transaction closes at the end of the second quarter of this fiscal year, Walmart expects a negative impact
to FY19 EPS of approximately $0.25 to $0.30, which includes incremental interest expense related to the investment.
In FY20, as we look to accelerate growth in this important market, Walmart anticipates an EPS headwind in total of
around $0.60 per share, comprised of:
。 Operating losses of approximately $0.40 to $0.45 per share, assuming minimal tax benefit for the losses in the near
to mid term. This amount includes about $0.05 per share related to amortization of intangible assets and depreciation
of short lived assets resulting from purchase accounting, which will only last for a few years post-closing.
Interest expense of approximately $0.15 per share.
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In the mid to long term, as the business scales and efficiencies are realized, we expect losses to decline and returns to
improve.
Given Walmart's financial strength, we anticipate the continuation of our current share buyback program, while
maintaining our strong credit profile.
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