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SoftBank Agrees to Sell Flipkart Stake to Walmart

TOKYO—SoftBank Group Corp. said Wednesday it has agreed to sell its entire stake in India’s Flipkart Group to Walmart Inc., clearing the way for SoftBank to step up investment in a Flipkart rival.

The action ends weeks of uncertainty over where SoftBank Chief Executive Masayoshi Son, who runs the world’s largest technology fund, is placing his bets in India’s booming e-commerce market.

Walmart said earlier this month that it would take control of Flipkart, India’s largest e-commerce company, for $16 billion. Mr. Son had wavered on whether to sell his Vision Fund’s 21% stake to Walmart as part of the deal.

A person familiar with the deliberations said SoftBank was weighing tax considerations and the possible merits of keeping a stake until a public listing of Flipkart shares, which Walmart has said it plans within four years.

A SoftBank spokesman on Wednesday declined to comment beyond confirming that Mr. Son decided to sell. Flipkart and Walmart weren’t immediately available for comment.

Mr. Son said earlier that the Walmart deal gave the SoftBank Vision Fund’s stake in Flipkart a value of about $4 billion, up 60% from what it paid nine months earlier.

By pocketing his profit, Mr. Son can direct his energies elsewhere in India. He told The Wall Street Journal last week that he was considering a bigger investment in Paytm, a digital-payments startup that also runs an online marketplace competing against Flipkart and Amazon.com Inc.’s India unit.

SoftBank’s Vision Fund invested $1.4 billion in Paytm parent One97 Communications last year. It has since invested $110 million alongside Chinese internet giant Alibaba Group Holding Ltd. into Paytm’s online retailer, Paytm E-Commerce.

SoftBank was an early investor in Alibaba, and the two companies share many ties. Alibaba chief Jack Ma is on SoftBank’s board.

The Vision Fund manages nearly $100 billion from backers including the sovereign-wealth funds of Saudi Arabia and Abu Dhabi, and companies such as Apple Inc., Qualcomm Technologies Inc. and Foxconn Technology Group.

Write to Mayumi Negishi at mayumi.negishi@wsj.com

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