DealBook Briefing: The Inside Story of How Walmart Won Over Flipkart

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How Walmart sealed its $16 billion deal for Flipkart

The retail giant began the journey to its biggest-ever takeover nearly two years ago, by embarking on a big move into e-commerce and emerging markets like India. But the deal had some twists, from an aborted 2016 approach by Walmart to an aggressive challenge for Flipkart by Amazon.

From Michael’s account:

By last November, Walmart was ready to discuss a deal. Initially, Walmart was focused on acquiring a minority stake in Flipkart, these people said. But over time, both sides came to realize that Flipkart could better realize its ambitions if Walmart owned a majority stake. From a business perspective, Flipkart would provide a base for e-commerce dominance in India, while Walmart could give a crucial boost in the grocery delivery business.

Michael also noted how big some Flipkart investors’ paydays will be. Accel will get seven times its original investment, Tiger Global four times. And SoftBank, which only invested nine months ago and whose founder spilled the beans on the deal, is looking at a 60 percent return.

Down the road: Flipkart and its remaining investors still hope the company will go public someday. Walmart is on board.

Critics’ corner: Walmart’s shares fell 3 percent after the deal was announced, but it’s still the company’s best hope of breaking into India, according to Sarah Halzack of Bloomberg Opinion, while Una Galani of Breakingviews sees it as a test of Walmart’s ability to compete with Amazon abroad.

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Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.

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How Michael Cohen made $2 million as a gatekeeper

He didn’t join the White House. But President Trump’s fixer brought in huge payouts from Squire Patton Boggs, AT&T, Novartis and others with the prospect of access to power.

Among the latest revelations:

• AT&T told employees that it paid $600,000 for antitrust insight into antitrust matters as it sought backing for its $85.4 billion takeover of Time Warner.

• Novartis was worried about Mr. Trump moving against the Affordable Care Act and promising to cut drug prices.

• Mr. Cohen helped Squire Patton Boggs land a client: U.S. Immigration Fund, which connects American businesses with foreign investors and which the WSJ says has ties to Kushner Companies.

He sought those clients out, according to Michael Avenatti, Stormy Daniels’s lawyer.

Some White House critics, like the Democratic senator Brian Schatz, snarked about it all:

Mr. Cohen’s self-assessment in 2017, according to the WaPo: “I’m crushing it.”

The latest fallout from Trump’s foreign policy

In Mexico: President Trump’s antagonism has lifted Andrés Manuel López Obrador, a Trumpian presidential candidate who unnerves corporate leaders, according to Bloomberg Businessweek’s latest cover story.

In Iran: Oil prices changed little after Mr. Trump withdrew from the nuclear deal, but businesses are watching how tightly his administration enforces renewed sanctions. Boeing, which stands to lose a $20 billion deal, has played down the impact.

In China: Sanctions have put ZTE, once one of the country’s most successful tech companies, at death’s door. One analyst cautioned: “In the long run, strategically, this might be worse for the U.S. than the current situation.” Meanwhile, Beijing is reportedly looking for potential U.S. imports to avoid a trade war.

The political flyaround

• Democratic senators asked Carl Icahn and Scott Pruitt to explain how the Icahn-owned CVR Energy won exemption from a biofuels law. (Reuters)

• Automakers who wanted looser regulations fear the Trump administration may go too far. (NYT)

• Mick Mulvaney has shifted the C.F.P.B.’s student loan unit into its consumer information division, potentially sidetracking an investigation into the lender Navient, and irritated former colleagues in Congress by asking them to reduce their expenses.

• President Trump wants pharmaceutical companies to charge more abroad to cut prices in the U.S. The plan, like other administration policies on the drug industry, has strong critics.

How fierce will New York’s next attorney general be?

Eric Schneiderman went after big banks for mortgage abuses and fought the Trump administration on environmental rules. Whoever replaces him must decide whether to follow in his litigious footsteps.

His interim replacement, Barbara Underwood, said she plans to continue that work, though less aggressively. The first test may an investigation into whether Exxon Mobil misled shareholders about climate change.

The legal issues flyaround

• Jay Alix, a prominent restructuring specialist, sued McKinsey & Company, accusing it of misleading bankruptcy courts about conflicts of interest. (NYT)

• NBCUniversal’s legal team — with unusually little help from outside lawyers — cleared NBC News executives of wrongdoing in their handling of Matt Lauer. (NYT)

• Royal Bank of Scotland agreed to pay $4.9 billion to settle with the Justice Department over the sale of toxic mortgage-backed securities in the lead-up to the global financial crisis. (WSJ)

• Wells Fargo acknowledged pocketing fee rebates that it should have passed on to a public pension fund in Tennessee. (WSJ)

• Wu Xiaohui, who founded Anbang of China, was sentenced to 18 years in prison for fraud. (NYT)

Gun control activists (and nuns) score a win at Sturm Ruger

For weeks, the gun maker had urged shareholders to reject a proposal by nuns demanding more transparency on plans for safer firearms. But investors sided with the nuns, ordering Sturm Ruger to prepare a report on how it tracks violence tied to its products and information on its research into so-called smart guns.

Sturm Ruger’s C.E.O., Christopher Kilroy, played down the significance of the move, saying: “That’s it, a report.” And a former N.R.A. executive, Sandra Froman, won re-election to the board.

Why Fox struck a deal while it waits for Disney and Comcast

Though 21st Century Fox may increasingly regard Sinclair Broadcasting as a rival, the transaction that they announced yesterday — where Fox will buy seven stations from Sinclair and Tribune for $910 million — makes sense. Fox has wanted to own more of its local affiliates, while Sinclair needs to satisfy antitrust regulators.

Meanwhile, Fox’s quarterly earnings announcement yesterday shows why Disney and Comcast are hungrily eyeing its assets, says Tara Lachapelle of Bloomberg Opinion.

Elsewhere in deals: Sears shareholders loved the its agreement to install tires for Amazon customers. The U.S.-based Stealth BioTherapeutics reportedly plans to go public in Hong Kong. The Asmodee Group, the game company behind DealBook favorite Settlers of Catan, is reportedly considering selling itself for more than $1.7 billion. How Goldman Sachs got stuck on a bad Burberry trade. SoftBank’s Vision Fund has found more investors.

The speed read

• Qatar’s sports network is being bootlegged on a remarkable scale, probably as part of a Saudi-led blockade. (NYT)

• FIFA met with seven leading soccer teams to pitch an expanded Club World Cup. (NYT)

• California became the first state to require all new homes to have solar power. (NYT)

• A new bill in Germany could allow collective lawsuits for the first time. (WSJ)

• Voice systems like Siri and Alexa will obey orders inaudible to humans, researchers have shown. (NYT)

• Meet Japan’s Bitcoin king, who has been scooping up financiers from his old employer, Goldman Sachs; and Silvergate Bank of San Diego, a community lender that has become a go-to for the cryptocurrency industry.

• Ev Williams, of Blogger, Twitter and now Medium fame, has a manifesto for fixing the internet. (NYT)

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