Walmart agrees to a $16 billion deal to buy a majority stake in India’s Flipkart

Walmart has agreed to a deal to buy a majority stake in Indian e-commerce giant Flipkart for $16 billion.

The U.S. retail giant said Wednesday that it would acquire an initial stake of roughly 77 percent in Flipkart. The remainder of the business will be held by existing investors, including Flipkart’s co-founder Binny Bansal, Tencent, Tiger Global and Microsoft.

Walmart said in a statement that its long-term aim would be to support Flipkart’s transition into a publicly-listed subsidiary. The retailer said it expects India’s e-commerce market to grow at four times the rate of the overall retail industry.

Walmart’s president and chief executive, Doug McMillon, said the investment in Flipkart was part of the company’s aim to invest in India’s fast-growing economy.

“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 in a statement.

Walmart’s investment in Flipkart includes $2 billion of fresh equity funding. Walmart said it will use a combination of newly issued debt and cash to finance the round. The two companies are in talks with other potential investors to join the investment, which could reduce Walmart’s stake.

Both companies will keep their distinct brands and operating structures, Walmart said. A final close to the deal is expected to take place later this year.

Earlier on Wednesday, SoftBank CEO Masayoshi Son said Walmart had reached an agreement to take control of Flipkart.

SoftBank is currently one of the largest shareholders in Flipkart. According to some reports, the Japanese tech giant is set to sell its entire stake as part of the deal.

Flipkart has 100 million users signed up to its platform, according to the company’s website. India is seeing rapid growth in its digital economy with the emergence of e-commerce start-ups like Snapdeal and Paytm.

The investment will see Walmart take on U.S. e-commerce firm Amazon in a key growth market for the company. In 2016, Amazon CEO Jeff Bezos announced that his company would invest $3 billion in India. Amazon reportedly made its own bid for a majority stake in Flipkart.

Walmart’s deal with Flipkart marks the retailer’s latest move to up its international presence. in late April, Walmart’s U.K. supermarket brand Asda merged with rival Sainsbury’s, a tie-up that presented a significant competitive challenge to Britain’s dominant grocer Tesco.