Walmart will spend $16 billion to acquire 77% of India’s largest e-commerce firm Flipkart, its largest acquisition in the Bentoville, Akransas-headquartered company’s 56-year old history, but minority shareholders will continue to enjoy several important rights.

According to the some of the details of the Shareholders Agreement revealed by Walmart in a filing with the Securities and Exchange Commission, 60% of minority shareholders acting together can block certain significant transactions.

“…holders of 60% of the Flipkart shares held by the Minority Shareholders, acting together, may exercise veto rights to prevent certain significant transactions or other events involving Flipkart, while holders of 40% of Flipkart share held by the Minority Shareholders, acting together, may exercise veto rights to prevent certain material, non-arms’ length transactions between Flipkart and Walmart,” the filing stated.

Further, according to a Registration Rights Agreement to be entered into concurrently with the shareholders agreement, Walmart could be forced to effect an initial public offering within four years of the closing of the $16 billion transaction.

“…holders of 60% of the Flipkart shares held by the Minority Shareholders, acting together, may require Flipkart to effect an initial public offering following the fourth anniversary of closing of the transaction at a valuation no less than that paid by Walmart under the Share Issuance Agreement, subject to satisfaction of certain other conditions regarding such offering,” the filing added. Walmart did not indicate, what conditions would need to be satisfied for an IPO or the location of the IPO,

Once Walmart completes the transaction, minority shareholders will hold 13% of Flipkart’s shares. In essence, less than 10% of Flipkart’s shareholders acting together can block certain significant transactions, block non-arms’ length transactions between Flipkart and Walmart or demand and IPO of Flipkart.

While Walmart did not comment after the US SEC filing on May 11, Judith McKenna, president and CEO of Walmart International explained the rationale of the shareholding structure in an investor call after the deal was inked. “One of the things that was important to us here was to have some partners alongside as well. So having Tencent, Microsoft and Tiger Global who were already present in the business would be really powerful. The business would be run through an independent board. It will have some Walmart representatives on there. But we will that this structure will help keep intact the entrepreneurial spirit of the business and help guide it strategically,” McKenna said.

Minority shareholders would remain powerful but only if Walmart owns less than 85% in Flipkart.

The Shareholders Agreement includes a “drag along” clause which provides that Walmart and a percentage of minority shareholders can exercise force the remaining shareholders to sell all or a portion of their shares in a sale of Flipkart. “If the drag along is exercised, each minority shareholder must be entitled to sell all of its shares in the proposed transaction. The requirement that some percentage of minority shareholders exercise of the the drag along right will not apply if Walmart owns 85% of the outstanding shares of Flipkart,” the filing added.

The filing also shed light on how the new board of directors of Flipkart would be constituted. The new board will have eight members, five Walmart-appointed directors, two directors appointed by minority shareholders and one founder. However, for at least two years after the closing of the transaction, Walmart-appointed directors cannot be affiliated with Walmart. The number of directors may be raised to nine at any time and at that point the additional director would be appointed by Walmart, with approval of a majority of the Flipkart directors. The additional director must not be affiliated with Walmart.

The $16 billion transaction includes $14 billion of share purchase and $2 billion of fresh issuance of shares. Once the entire transaction is complete, all of the preference shares in Flipkart will be converted to ordinary shares. Walmart can also request Flipkart to issue additional ordinary shares with an aggregate purchase price of upto $3 billion within the first year after the closing of the $16 billion transaction.

There is of course the exit clause in both the Share Issuance Agreement and Share Purchase Agreement. If there is an adverse change in Flipkart’s business, regulatory approval by the Competition Commission of India is not received or government or shareholder litigation challenges the transaction, the deal will be called off.

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