US retail giant Walmart on Wednesday bought a 77% stake in Indian e-commerce company Flipkart for $16 billion, as it looks to take on Amazon and Alibaba in the country's growing market.

The remaining shareholding would be shared among Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management and Microsoft Corp.

The deal is expected to close later this calendar year.

Here is everything that you need to know about the Walmart-Flipkart deal:

The deal

Walmart will pay about $16 billion for an initial stake of 77 % in Flipkart.Once new investors come in, the shareholding of Walmart may reduce marginally, but it will still retain a controlling majority stake in Flipkart.

Walmart intends to use a combination of newly issued debt and cash on hand.

Walmart’s investment $2 billion of new equity funding.

Upon closing, Flipkart’s financials will be reported as part of Walmart’s International business segment.

The future of the Flipkart

Walmart said it supports Flipkart’s ambition to transition into a publicly-listed, majority-owned subsidiary in the future.

Walmart said its per share earnings could see an impact of between 25 and 30 cents, if the deal were to close by the second quarter of this fiscal year, including incremental expenses related to investment.

Walmart also sees a hit of about 60 cents per share on its earnings in financial year 2020, as it accelerates investments in India.

The company said it would continue its current share buyback program.

The Board

While Walmart will retain a 77% stake initially, remainder of the business will be held by Flipkart’s existing shareholders, including co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management and Microsoft Corp.

Sachin Bansal will exit, its unclear if Binny Bansal has sold any portion of his 5.6% stake in Flipkart but Sachin Bansal with 5.9% stake has exited the company.

Walmart's stake will reduce marginally as newer investors pitch in, though the company will retain a majority shareholding in Flipkart.

South African Internet and entertainment firm Naspers sold its entire 11.18% stake in Indian e-commerce firm Flipkart to Walmart Inc for $2.2 billion for a 32% gain, it said on Wednesday.

Expansion in India

Walmart said as it scales in India, the company will continue to partner with companies in sectors including agriculture, food and retail.

The company said it would support small business and the government's ‘Make in India,’ scheme.

Walmart will partner with kirana owners and members to help modernize their retail practices and adopt digital payment technologies.

Read our comprehensive coverage of the deal here.

First Published:May 9, 2018 5:19 PM IST