After six months of hard negotiation, the acquisition between Snapdeal and Flipkart may not find its way to the finish line. According to latest developments, the merger is most likely to fall apart as a crucial meeting between the representatives of the two parties was recently quashed at last minute.
“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,” Snapdeal spokesperson said in an emailed statement, without naming Flipkart.
As per media reports, Snapdeal’s representative firms, J Sagar Associates, and Credit Suisse were supposed to meet their Flipkart counterparts, Khaitan & Co and Goldman Sachs, to close the merger deal in the ensuing meeting.
“Snapdeal’s vision has always been to create life-changing experiences for millions of buyers and sellers across India. 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 company said in the statement.
One of the leading contenders in the Indian e-commerce space, Snapdeal has seen its fortunes falling amid strong competition from Amazon and Flipkart. Its largest investor, SoftBank had been proactively mediating the talks for the sale.
Had the Snapdeal-Flipkart deal come through, it would have marked the largest acquisition in the Indian e-commerce landscape. Compared to a peak valuation of about $6.5 billion in February 2016, the talks had valued Snapdeal at about $1 billion.
India’s fledgling e-commerce sector is in the midst of a pitched battle for supremacy between US online retail giant Amazon and homegrown market leader Flipkart, at a time more and more Indians are shopping online, helped by a spurt in an availability of affordable phones and data plans. Read more about Indian Startup Ecosystem.