Snapdeal board agrees to Flipkart deal – Mobile World Live

Snapdeal board agrees to Flipkart deal

26 JUL 2017

Indian e-commerce giant Snapdeal’s board reportedly agreed to a takeover by larger rival Flipkart, in a deal worth up to $950 million.

According to two sources cited by Reuters, the board of Jasper Infotech, Snapdeal’s parent company, approved Flipkart’s bid between $900 million and $950 million last week, but the deal could still face opposition from smaller Snapdeal shareholders which also need to approve the move.

Earlier this month, Snapdeal turned down an initial takeover offer of $750 million from Flipkart, but negotiations continued, with a deal tipped to be reached by mid-July.

Snapdeal had a peak valuation of $6.5 billion in February last year, but the figure has plummeted as competition in India’s e-commerce market intensified.

A merged Snapdeal, Flipkart entity would look to combine and take on Amazon in the domestic market.

Amazon has emerged as a major player in the country’s growing e-commerce segment, and has committed to a $5 billion investment.

Reuters added that the share swap deal would also give Japanese company SoftBank Group, Snapdeal’s biggest investor, a stake in Flipkart.

SoftBank invested $627 million in Snapdeal in 2014, and has gone on to invest nearly $2 billion in the e-commerce company and is one of the company’s largest investments in the Indian market.

India’s e-commerce market is booming as more people in the country are shopping on the internet, given rising smartphone penetration and cheaper data tariffs.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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