If everything goes as planned for SoftBank Group, Snapdeal’s biggest investor, India’s third largest online marketplace Snapdeal will be soon a Flipkart owned company. According to Reuters, the board of Snapdeal has finally agreed on the $900 million buyout bid from rival Flipkart. The deal is now waiting for approval from Snapdeal’s smaller shareholders.
Once the deal goes through, Flipkart will fully own Snapdeal’s online marketplace. However, Snapdeal’s subsidiaries companies including FreeCharge, the logistic company Vulcan Express and e-commerce solutions provider Unicommerce are still up for sale. Paytm, Amazon India and even Axis Bank has shown interest in the payment company FreeCharge.
The Flipkart-Snapdeal deal involves shares-swap, were SoftBank Group will gain around 20 percent in Flipkart. Before the deal, SoftBank Group will buy out the stake from Snapdeal’s other major investors Nexus Venture Partners and Kalaari Capital. Little a year ago Snapdeal was valued around $6.5 billion and now the company is selling out for less than $1 billion.
The buyout of Snapdeal would be Flipkart’s biggest takeover since it bought out online fashion portal Myntra for $300 million in 2014 and Jabong for $70 million in 2016. Once Snapdeal comes under Flipkart we can expect the competition to get more intense between e-commerce players in India. It will be then fighting for complete dominance between Amazon India and Flipkart.