Hogan Lovells' Tech Team Takes Lead on Walmart's $16 Billion Flipkart Buy
The global legal giant is working with lawyers from Gibson, Dunn & Crutcher, Gunderson Dettmer and at least six other firms on a deal that will see the world's largest retailer acquire a majority stake in a growing e-commerce company.
May 09, 2018 at 06:40 PM
5 minute read
Walmart store. Credit: Diego M. Radzinschi/ ALM
Lawyers from a half-dozen large law firms are advising on a $16 billion deal announced Wednesday that will see Walmart Inc. acquire a majority stake in Indian e-commerce giant Flipkart Internet Private Ltd., better known as Flipkart.
The transaction will see Walmart take a 77 percent stake in Bengaluru-based Flipkart. The remainder of the online shopping company will be owned by its existing investors, including Flipkart co-founder Binny Bansal, Chinese conglomerate Tencent Holdings Ltd., hedge fund Tiger Global Management and technology industry titan Microsoft Corp.
Hogan Lovells M&A partners Richard “Rick” Climan and Christopher Moore in Silicon Valley are advising Walmart on the largest e-commerce deal in its history, along with Singapore managing partner Stephanie Keen. Hogan Lovells won a bidding war nearly a year ago for Climan and his technology transactions team, which previously worked at Weil, Gotshal & Manges. Moore left Weil in June to join Hogan Lovells.
Since then, Climan and Moore have worked closely on a number of large deals, including advising Marvell Technology Group Ltd. on its pending $6 billion buy of Cavium Inc. and Synopsys Inc. on its $565 million acquisition of Black Duck Software Inc. By getting the work on Walmart's proposed purchase of Flipkart, Hogan Lovells hopes to cement its role as a power player in the market for high-end technology sector transactions in Silicon Valley.
When Walmart paid $3.3 billion in 2016 to buy Jet.com Inc., the Bentonville, Arkansas-based acquirer turned to an outside legal team led by Fenwick & West and Gibson, Dunn & Crutcher. The latter has been a longtime legal adviser to Walmart on a variety of matters, from high-stakes litigation to bribery allegations involving a subsidiary in Mexico.
Regulatory compliance expert Kelly Austin, partner-in-charge of Gibson Dunn's Hong Kong office and a member of the firm's executive committee, is leading a team representing Walmart on the deal that includes white-collar partners Michael Farhang and F. Joseph Warin and associate Oliver Welch. Leading Indian firm Shardul Amarchand Mangaldas & Co is also advising Walmart on the deal.
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, which has served as outside counsel to Flipkart since 2011, including advising the company last year on a $2.5 billion investment from Japan's SoftBank Group Corp.'s Vision Fund, is serving as lead M&A and international counsel to the company on its proposed sale to Walmart. Gunderson Dettmer partners Andrew Luh, Mark Foster, Steven Baglio, David Sharrow, Jonathan Pentzien and Ferish Patel are heading up a team from the firm advising on the matter. Pentzien and Patel are based out of a Singapore office that Gunderson Dettmer opened a little over a year ago.
Singapore's Allen & Gledhill, Dentons Rodyk & Davidson (an affiliate of Dentons in Singapore) and India's Khaitan & Co and Cyril Amarchand Mangaldas are also advising Flipkart on its deal with Walmart. The online retail platform was founded in 2007 by two former Amazon.com Inc. employees, Sachin Bansal and Bansal. The two Bansals are not related. In a Facebook post, Flipkart executive chairman Sachin Bansal confirmed that he will leave the company after selling his entire 5.5 percent stake and becoming an instant billionaire.
Trilegal, another top Indian firm, is advising Cape Town-based Naspers Ltd. on the sale if its 11 percent stake in Flipkart, a move that Bloomberg LP reports will earn Africa's largest company a cool $1.6 billion.
The acquisition of Flipkart is the latest in a series of deals by Walmart in recent years to help the company compete for customers with e-commerce industry leader Amazon. The deal also calls for Walmart to invest $2 billion in equity funding into Flipkart. Walmart is keen on gaining market share in India, where Flipkart claims to have 100 million users signed up to its platform.
“India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of e-commerce in the market,” said a statement from Walmart president and CEO C. Douglas McMillon. “As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market.”
Earlier this year, Walmart hired Rachel Brand, the former third-in-command at the U.S. Department of Justice in Washington, D.C., to serve as its new general counsel following the retirement of predecessor Jeffrey Gearhart. Walmart's massive in-house legal department, which has adopted innovative means of selecting outside counsel, has also received accolades for its commitment to diversity.
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