Flipkart has joined hands with Goldman Sachs, an investment banking giant for the proposed acquisition of its e-commerce rival Snapdeal. Goldman Sachs has already started working with Credit Suisse to finalise the terms and conditions for the merger.
As revealed by an informer that the sale is about to be setteled in coming weeks and it is indicating that the transaction which will check the greatest acquisition in ecommerce business of India and reshape the nation’s online retail scene, is entering its final lap. Credit Suisse had been commanded by Snapdeal, and its essential partners, to consider the potential advantages of procurement by Flipkart, and exhort the Gurgaon-based organization’s board. It had made an introduction to the board half a month prior. In fact, Flipkart didn’t reply to the mail for clarification.
The Snapdeal sale had confronted obstacle, since its initial benefactors Nexus Venture Partners and Kalaari Capital are waiting for more noteworthy profits which has been evaluated between $70 million to $100 million each. As you already heard about the snapdeal’s onboard breach prompted pullout of investment offer by Softbank. However, informer claimed that the two venture capitalists together hold almost 18% of Snapdeal stake, have already given their go ahead to the deal, which needs minimum three out of four stakeholders including Rohit Bansal and Kunal Bahl, company’s promoters, who control six out of seven seats on the board for endorsement. Kaalari has gained a return of almost $100 million after selling a part of its stake in 2014 and who has invested almost $27.5 million in Jasper Infotech board. On contrary, Nexus Venture Partners who had invested $40-$50 million never sold any of its stakes.
Snapdeal was giving a tough competition to Flipkart till 2015 to lead the e-commerce market. This acquisition of Snapdeal by Flipkart is expected to be go down in a two steps. It will also see Snapdeal’s biggest stakeholder, Softbank invest into $1.5 billion in Flipkart. In fact, one of the important Snapdeal’s investors, Softbank broaches for Snapdeal Sale, would be a Biggest Deal in Indian Ecommerce.
The Tokyo-headquartered financial capitalist is required to mix new subsidizes into Flipkart, and also purchase offers from Tiger Global, the New York-based speculator, which as of now is Bengaluru-based online retailer’s biggest shareholder. A week ago, Flipkart declared its greatest subsidizing round till date of $1.4 billion which was driven by China’s Tencent who has agreed to put $700 million in the organization. That round will indicate that eBay contribute $500 million and get Flipkart stock worth $200 million in lieu of its operations in India.
Snapdeal which was valued at $6.5 billion last year and the second largest e-commerce retailer in the country has seen a significant downfall in its sales mainly due to the growth of its American counterpart Amazon. Hit by these financial loss, Snapdeal had to lay off hundreds of employees to reduce its monthly expenditure.