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World's largest retailer Walmart Inc on Wednesday officially announced that it will buy a majority stake in Flipkart , making it one of the largest M&A deals in India.

Walmart will pick up 77 percent stake of Flipkart for $16 billion, valuing the company at about USD 20 billion. The remainder of the business will be held by some of Flipkart`s existing shareholders, including Flipkart co-founder Binny Bansal, China`s Tencent Holdings Ltd, Tiger Global Management LLC and Microsoft Corp.

Flipkart was valued at about USD 12 billion last year, according to researcher CB Insights. For Flipkart, the deal would give it additional capital and retail muscle to fight Amazon.

Sachin Bansal, who had co-founded Flipkart with Binny Bansal 11 years ago, will make his exit from the company by selling his entire stake (over 5 percent) to Walmart. However, the Binny Bansal and CEO Kalyan Krishnamurthy will stay in their respective official positions in the company.

Sachin and Binny, who are not related and formerly worked for Amazon.Com Inc, like their US rival began by selling books when they founded Flipkart.

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