Amazon has made a bid for a 60% stake in Flipkart, reports confirm

Amazon has made a formal offer to acquire a 60% stake in the Indian e-commerce giant Flipkart, challenging Walmart’s interest in taking a 80% stake in the firm.

News of the Amazon offer comes just days after reports suggested Walmart was nearing a deal to buy a majority stake in Flipkart by the end of June for $10 billion to $12 billion. The US retailer is pushing to expand its presence in India.

CNBC-TV18, the Indian affiliate of business news channel CNBC, was first to report on Amazon’s offer. Amazon reportedly offered an amount “on par” with Walmart’s (for a smaller stake in the firm) and included a $2bn break-up fee.

Like Walmart, Amazon has been trying to expand in the Indian market where online shopping is starting to increase rapidly.

The e-commerce industry in India is forecast to be worth $200 billion a year within a decade, up from $38.5 billion last year, according to the India Brand Equity Foundation.

Amazon currently has a 27 percent market share in India and Walmart’s expansion plans in the market represent a threat that could lead to intense price competition.

Two sources familiar with the matter confirmed to Reuters that Amazon is indeed interested in acquiring Flipkart but did not provide any other details.

The offer could trigger a bidding war between Amazon and Walmart – something the two retailers have already reportedly been involved in before.

Amazon made a bid to acquire a 51 to 55 percent stake in Flipkart a couple of years ago, but the offer was deemed to be too low at the time, a source told Reuters.

“Now with Walmart in the mix things are different,” the source said.

“To the best of my knowledge no decision has been made yet. There is no deadline per se.”