Rumors regarding the unpredictable merger of Snapdeal and e-commerce giant Flipkart have set the retail industry ablaze. The much-anticipated deal between a ‘troubled’ Snapdeal and a ‘less troubled’ Flipkart is orchestrated by Tiger Global and SoftBank, the major venture capital investors in Flipkart and Snapdeal. Just recently, the e-commerce giant revised its offer for purchasing its rival Snapdeal. The company is likely to invest around $900-$950 million, as reported by ET. The enthusiastic consumers are expecting this deal by the end of this month or early next month.
Last year, the VCCircle revealed details on initial merger talks between Snapdeal and Flipkart. The Snapdeal initially requested an acquisition amount of $1 billion for the merger. The new ‘revised offer’ proposed by Flipkart is somewhat close to the official amount.
Flipkart proposed a takeover offer worth $800-$850 million earlier, an offer that was rejected by the Snapdeal board. Following a long discussion on the topic, Flipkart is all set to propose the new offer next week. SoftBank, the leading investor in Snapdeal is proactively mediating this merger since the last couple of months.
Why Does Flipkart want to Buy Snapdeal?
Consumers and retail observers are confused why would someone in the right frame of mind want to buy Snapdeal, an e-commerce website that is experiencing a financial crisis already?
While we may not understand the reason behind this merger, the experts feel this decision would provide an ‘extra momentum’ to Flipkart. They might find some value in the widespread logistics network of Snapdeal. Moreover, the merger would eliminate another potential competitor from the market.
Concurrently, Snapdeal is involved in two separate discussions for selling Vulcan Express (logistics service) and Freecharge (mobile wallet). This merger is going to be one of the biggest acquisitions in the history of Indian e-commerce. All online customers look forward to the alliance between two of the biggest Indian market giants.