Rumours of Snapdeal and Flipkart are doing rounds in the business arena. While this will essentially benefit the two online retail giants, there is a Japan bank too which is likely to benefit from this mega merger.
This merger, if manifested in reality will emerge as the biggest consolidation in the Indian e-retail market. Japan’s SoftBank is thrusting on this deal. Are you thinking what a bank has got to do with e-retail giants? Let us come to your rescue.
Reportedly, the major Japanese bank Softbank is likely to invest $1.5 billion in the merged firm; to become stakeholder of around 15%.
As the Japanese bank is a leading investor in Snapdeal, patience and saturation level of the Banks seems to have boiled down to zero.
Seems like Softbank has offered a gentle ultimatum to the the Snapdeal owners. SoftBank has given three favourable options for Snapdeal- merge with Flipkart, combine with Alibaba-led Paytm, or a write down of SoftBank’s investment to zero, a media report suggested.
However, when asked Snapdeal or SoftBank about the merger, Flipkart junked the news and said that any merger speculation was “false and baseless”.
Flipkart recently raised $1 billion from China’s Tencents and Microsoft. Following this investment round, the major rumour of Snapdeal and Flipkart merger broke out.
A series of Big-billion days and deep-discount sales have devoid the e-retail companies of cash and left them in a state of jeopardy. What remains to be seen is how the alleged merger will take shape in the coming days.
The success of flipkart has been thwarted by the international giant, Amazon. On the other hand, Snapdeal is coping up with it’s laggards-financial and operational.
The Snapdeal-Flipkart merger gained momentum when SoftBank founder Masayoshi Son was involved closely into the deal.
The current scenario spells major hurdles in the country’s e-retail sector, which are likely to pose as major threats to the existing businesses. The world’s largest Alibaba is also planning to foray into the vast Indian market in the form of a Joint Venture with Paytm Mall, One97’s physical goods marketplace.
