No, it’s not going to happen! Snapdeal is not going to get merged or acquired by Flipkart. Snapdeal has reportedly called off the sales with Flipkart and ending all talks about its sale. It has decided to remain an independent e-commerce store in India. The founders, Kunal Bahl and Rohit Bansal want to run a stripped down version of the e-commerce store under their Snapdeal 2.0 strategy.
Earlier, the majority board of Snapdeal had in-principle agreed to the $900 million buyout bid from Flipkart. The deal was pending approval from smaller shareholders. But the founders of Snapdeal were looking for an alternative independent path to run a leaner, meaner version of the erstwhile company. This seems to be a major set back for Softbank Group the biggest investor in Snapdeal, who was pushing the deal with Flipkart. This would also add a consderable amount of stakes in Flipkart for Softbank Group.
“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,” said the company in a statement. “We have a new and compelling direction – Snapdeal 2.0 – that uniquely furthers this vision, and have made significant progress towards the ability to execute this by achieving a gross profit this month,” the statement added.
Snapdeal founders, Kunal Bahl and Rohit Bansal strategy of Snapdeal 2.0 had the backing of smaller shareholders including its early investors Kalaari Capital and Nexus Venture Partners. For its day-to-day operations, the company is looking to sell some of its non-core assets. This includes the payment company FreeCharge, the logistic company Vulcan Express and e-commerce solutions provider Unicommerce.
Snapdeal calls off Flipkart deal
- Snapdeal has called off the possible acquisition from rival Flipkart.
- The company has terminated all strategic discussions regarding its sale.
- The founders will now pursue an independent path by running a leaner, meaner version of the company under Snapdeal 2.0 strategy.
- Will continue looking to sell some of its non-core assets including its logistic company Vulcan Express.
Giving Snapdeal a financial boost, it has already announced the sale of its payment solution FreeCharge to Axis Bank. The deal is worth $60.04 million and Axis Bank will also absorb around 200 of the FreeCharge employees.