It’s official now. The much-awaited Flipkart-Snapdeal merger has fallen apart. The e-commerce platform Snapdeal, which was in talks with Flipkart to sell out its business entity, has decided to pull out of the deal. It will pursue an independent path to continue its operations.
After a series of offers by Flipkart, the e-commerce major had offered a final deal of $900-950 million to the beleaguered marketplace platform Snapdeal.
“We have 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,” Snapdeal spokesperson quoted in an emailed statement sent to media houses.
The statement added that the company has a “new and compelling direction – Snapdeal 2.0” and has made significant progress towards the ability to execute this by achieving a gross profit this month. In addition, with the sale of certain non-core assets, Snapdeal is expected to be financially self-sustainable.
The development comes a few days later when Snapdeal’s largest investor SoftBank had threatened to walk out of the deal.
According to media reports, Softbank was pursuing an opportunity to independently invest in Flipkart without taking along Snapdeal.
Even earlier, the deal had stuck various roadblocks posed by investors and government regulation.
Snapdeal’s other investors — Kalaari Capital and Nexus Ventures — had expressed their worry over the returns they would receive in case of acquisition of the company.
In July, the deal stuck a roadblock when Premji Invest, the personal investment arm of Wipro chairman Azim Premji, objected over preferential treatment being given to particular stakeholders.
According to media reports, Snapdeal co-founders Kunal Bahl and Rohit Bansal were pushing for a sale to Infibeam or getting Snapdeal to survive as an independent company by cutting jobs and scale of the business.
The push for acquisition on the hands of Infibeam will led the duo will have some control on the company in case Infibeam bids for the beleaguered marketplace.
This month, Jasper Infotech eventually sold its payments firm FreeCharge to Axis Bank for Rs 385 crore in an all-cash deal. The company’s payment firm had been in talks with various players and went through many roadblocks, eventually clinching the deal.