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.