Snapdeal, Freecharge deals likely to get sealed soon: Reports

It looks like uncertainty around fate of Snapdeal and Freecharge will end shortly. While news reports hinted about Snapdeal acquisition by Flipkart is close to materialise as board of the Gurugram-based company agreed with revised offer, Freecharge is all set to be acquired by Axis bank.

According to the reports, Flipkart's offer of $900-950 million has been accepted by Snapdeal's board, and is now subjected to shareholders’ approval. On the other hand, board of the beleaguered online marketplace has reportedly given nod to to sell the digital payments platform to Axis Bank for $60 million (Rs 385 crore-Rs 390 crore).

FreeCharge was acquired by Jasper Infotech (parent company of Snapdeal and Freecharge) in 2015 in a cash-and-stock deal estimated at $400-450 million (Rs 2,400 to 2,800 crore), in what was then the largest acquisition in the Indian startup space.

The Snapdeal-Flipkart deal is expected to be executed in several parts. Softbank will first buyout share of investors - Nexus Ventures and Kalaari Capital followed by capital infusion in Flipkart from Softbank. After the due process, Snapdeal will finally merge with Flipkart.

While the news reports anticipated that Flipkart-Snapdeal deal will get sealed by early next week, formal announcement of Freecharge deal will be announced later this week. Post merger, SoftBank is slated to hold 20 per cent in the combined entity.

Last week, Entrackr reported about Infibeam’s interest in Snapdeal. The company's co-founders Kunal Bahl and Rohit Bansal are reportedly pushing for a sale to Infibeam to have some control on the marketplace.

Over the past one month several suitors including Times Internet, Bank of Baroda and Paytm queued up to bid for Freecharge. Most recently, Amazon reportedly offered a term sheet to buy the digital payment platform for around $70-80 million.

Meanwhile, negotiations were on to ensure that the 200-250 employees of FreeCharge are also absorbed by the firm that acquires the company.

Going forward, if merger of the Kunal Bahl led with Flipkart gets delayed, the payout from Freecharge sale will provide operational liquidity for a few additional months to the Softbank-funded company.