The truth is…
Amazon tried acquiring Flipkart, thrice!
This is the time when Amazon was about to enter the Indian market. Amazon offered about 500–700 Million US Dollars to Flipkart when the valuation of Flipkart was upwards of 1 Billion US Dollars. Obviously, this deal didn’t work out.
Again, Amazon tried acquiring Flipkart and made an offer of 8 Billion US Dollars. This time, Flipkart was soaring high with a valuation of 15.5 Billion US Dollars. The offer by Amazon didn’t make any sense.
You see, both these times, Amazon tried to get a lowball deal with Flipkart by trying to acquire it at half the valuation, which, by the way, didn’t go well with the investors of Flipkart.
The early buzz was that Flipkart was in talks with Walmart to sell approx 75% stake for about 15–16 Billion US Dollars which would have given Flipkart a valuation upwards of 20 Billion US Dollars.
/* For those of you who don’t know what Walmart is, Walmart is a retail giant of United States which is trying to set its foot in e-commerce space and also trying to make its presence stronger in India. Walmart acquiredfor 3 Billion US Dollars some time back to give competition to Amazon US. Now by acquiring a majority stake in Flipkart, Walmart will give tough competition to Amazon India and will make its presence in India through an Omni-channel model. */
This time, Amazon tried very hard to acquire Flipkart. Amazon offered to buy 60% stake in Flipkart which would have valued Flipkart at 22 Billion US Dollars, and also offered 2 Billion US Dollars as a breakup fee (which Flipkart would have pay in order to back out of the deal with Walmart).
This time, even if Flipkart would’ve said YES to this deal, the deal wouldn’t have been possible.
Reason? Competition Commission of India (CCI).
In simple terms, the combined Amazon-Flipkart entity would have more than 70% of market share which is against the market regulations. So, not possible (EDIT: This deal might be possible but it would raise a lot of eyebrows from CCI and a lot of legal and regulatory hurdles would have to be overcome (and some tweaking here and there), which, the investors of Flipkart would not want. With the Walmart deal, no such troubles were there.)
Also, for any deal between Amazon and Flipkart, the board members of Flipkart (founders and investors) should be interested as well. I don’t think they were interested in any deal with Amazon.
These are the reasons why Amazon didn’t buy Flipkart.