Indian ecommerce leader Flipkart has finally made its second buyout offer to Snapdeal. Yesterday, a Zeebiz report claimed that the Flipkart board has already approved the revised offer for Snapdeal. Though the report never divulged the amount of the offer that the Flipkart board had approved, but today a Reuters report revealed that the buyout offer made by Flipkart for the merger is somewhere between $900 million and $950 million.The merged entity is expected to give a major push to the current cut throat competition going on between Jeff Bezos’ Amazon and India’s very own homegrown e-commerce leader, Flipkart. Reportedly, Bezos’ has recently decided to spend a whopping amount of $5 billion in India to gain significant share as the e-commerce market surges in the Indian subcontinent. The company is working hard to get a larger share of the $30 billion Indian e-commerce market.
During the start of the month, the troubled ecommerce firm rejected Flipkart’s initial $850 million buyout offer as Snapdeal’s board felt that the offer made by the ecommerce leader undervalued their company. But, then came the reports that Flipkart wasn’t yet ready to give up on Snapdeal and was considering making an improved offer to the firm.
The merger, which is being deemed as India’s biggest consolidation in the e-commerce sector till date, is taking a long time to materialise as initially Snapdeal’s early-stage investor Nexus Venture Partners (NVP) was not happy with the payout being offered by the Tokyo-headquartered telecom and internet giant SoftBank. Snapdeal’s founders, Kunal Bahl and Rohit Bansal, along with a couple of other small and mid-sized investors, will exit Snapdeal as well. The report claims that even Tiger Global is looking for a partial exit from Flipkart.
Back then, SoftBank’s founder Masayoshi Son claimed that the Flipkart-Snapdeal merger will prove to be a win-win situation for both the homegrown e-commerce players. It was also reported back then that Son, whose company owns about a third of Snapdeal parent Jasper Infotech Pvt. Ltd. was contemplating infusing another $500 million in Flipkart, a rumour which was confirmed yesterday in a Factordaily report. The amount will give Flipkart more fuel to battle it out with Amazon.
The report also shared that the $1.5 billion amount, which is the remaining amount will be used by SoftBank to pay back back Tiger (Global), Snapdeal’s investor. Tiger Global is also Flipkart’s largest shareholder.
Keep watching this space to find out if Snapdeal accepts Flipkart’s offer second time around.
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