US retail giant Walmart has signed a deal to buy a 77% stake in Flipkart, India’s largest e-commerce marketplace, for US$16 billion. The takeover has given one of the company’s founders and top investor SoftBank an opportunity to sell out.

Sachin Bansal sold his 5.96% stake in the company he founded in 2007 with friend Binny Bansal (not related) for $1.23 billion, Business Standard reported.

In a Facebook post, Sachin Bansal said: “It’s time to hand over the baton and move on from Flipkart. But I’ll be watching and cheering from the outside.” He said he would catch up on gaming and brush up his coding skills while taking a long time off.

The other key departure was SoftBank, Flipkart’s largest investor. SoftBank chief executive Masayoshi Son confirmed that the company would get about $4 billion from its $2.5-billion investment in the Indian firm last August.

Walmart said it would put $2 billion into new equity funding, while the remaining $14 billion would be used to buy stakes of existing investors in the Bangalore-based company. The US giant expects the deal will be closed later this year, subject to regulatory approvals.

No change in name

Walmart CEO Doug McMillon has said the company’s name would not be changed to Walkart. He also said there would not be a bureaucracy in the US trying to run the company, reports Economic Times.

The brick and mortar stores and online retail would be run separately for some time, he said.

“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,” McMillon said.

“Our investment will benefit India providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs.”

Meanwhile, Indian tax authorities have sent a letter to Walmart’s India office seeking details of the deal while alerting it to taxation laws that are relevant to such transactions, reports Economic Times.

Flipkart is registered in Singapore, but its operations are primarily in India. Tiger Global, Accel Partners and Naspers are key foreign stakeholders and their holdings are expected to be bought by Walmart, fully or partly, in deals done outside India, the paper said.

Meanwhile, Amazon has announced an infusion of funds for its local e-commerce unit amid a heightened sense of rivalry.

Amazon Seller Services, the marketplace unit of the US online retail giant in India, got 26 billion rupees ($390 million) late last month, according to documents filed with the Registrar of Companies, the Business Standard has reported.