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Snapdeal calls off merger talks with Flipkart
Snapdeal on Monday called off the $950-million takeover (over Rs 6,000 crore) by Flipkart, apparently over differences in valuation and terms of what could possibly have been the largest deal in the Indian e-commerce space. Discussions to acquire the beleagured Snapdeal by Flipkart were initiated in March, but contours of the deal could not reach a finality even after several rounds.
New Delhi: Snapdeal on Monday called off the $950-million takeover (over Rs 6,000 crore) by Flipkart, apparently over differences in valuation and terms of what could possibly have been the largest deal in the Indian e-commerce space. Discussions to acquire the beleagured Snapdeal by Flipkart were initiated in March, but contours of the deal could not reach a finality even after several rounds.
Differences emerge over valuation of $950-mn takeover
“Snapdeal has been exploring strategic options over the last several months. The company has now decided to pursue an independent path and is terminating all strategic discussions as a result,” a Snapdeal spokesperson said in a statement, without naming Flipkart.
The spokesperson added that the company will now pursue ‘Snapdeal 2.0’ which is expected to help Snapdeal be ‘financially self-sustainable.’
Japanese conglomerate SoftBank, which holds close to 35 per cent stake in Snapdeal and one that was driving the discussions, said it supports entrepreneurs and their vision. “We respect the decision to pursue an independent strategy. We look forward to the results of the Snapdeal 2.0 strategy, and to remaining invested in the vibrant Indian e- commerce space,” a SoftBank spokesperson said.
According to company sources, the talks ended on account of the complexity of the deal that came with multiple conditions, right from indemnity to a non-compete clause. These did not find favour with the founders of the Gurugram-based online marketplace, they added. The sources did not wish to be named as the discussions were private.
The deal was also contingent upon a nod from Snapdeal’s high-profile minority investors, including Ratan Tata and Azim Premji's investment arm, PremjiInvest. It wasn't immediately clear if any of the minority shareholders had objected to the deal.
