A day after Snapdeal-Flipkart merger fall out, Indian e-commerce giant Flipkart has now closed the much-anticipated deal with ebay India, which was announced in April when the Flipkart group raised $1.4 billion from global technology majors eBay, Tencent and Microsoft.
eBay, which also acquires a minority stake in Snapdeal, has made a $500 million cash investment in Flipkart that will own and operate eBay.in with immediate effect. In return, eBay will receive an undisclosed equity stake in Flipkart.
Here’s to the new member of the Flipkart family – @ebayindia. Looking forward to the journey of being bigger, better and stronger with you. pic.twitter.com/SdIoRB1gY3
— Flipkart (@Flipkart) August 1, 2017
The transaction involves 100 per cent acquisition of eBay India’s share capital by Flipkart along with CCPS (compulsorily convertible preference shares) of the company by eBay Singapore, as per the notice submitted to the regulator.
Henceforth Flipkart will acquire eBay’s Indian operations, which is expected to continue operating as an independent entity within the company that also houses online fashion stores Myntra & Jabong and payments platform PhonePe.
Besides, the companies will also partner to leverage opportunities in cross-border trade. Flipkart customers will get expanded product choices with the wide array of global inventory available on eBay India, while eBay’s customers across the world will have access to inventory from Flipkart sellers.
Flipkart CEO, Kalyan Krishnamurthy said, “Our coming together directly benefits Indian customers and sellers for whom we want to provide the best possible e- commerce experience. This is a step in that direction.”
In April, eBay CFO Scott Schenkel had said that they expect the deal to close early in the second half of 2017, and they will stop reporting active buyer GMV and related financials for ebay India after deal close. In June, Flipkart got the CCI’s approval to acquire ebay India.
The $11.6 billion valued Indian e-tailer was earlier in talks with Snapdeal for a much-awaited merger in Indian e-commerce history, which was dramatically terminated by the latter.