The much anticipated acquisition in India’s booming e-commerce sector – of Flipkart taking over beleaguered Snapdeal, turned into an anti-climax with the latter deciding to pull off from the negotiations.
Snapdeal co-founders Kunal Bahl and Rohit Bansal prevailed over their biggest investor Japanese telecom giant SoftBank Group, reports Business Standard. Bahl and Bansal hold just about 6.5% in Snapdeal, while SoftBank, with an investment of over $900 million, has around 33% in it.
Snapdeal issued a statement announcing that it was terminating all strategic discussions and would now pursue an independent path. While analysts foresee large-scale lay-offs, the beleaguered e-commerce company was silent over the issue.
For Softbank, the failure to close the proposed buyout marks a yet another setback to its plans to consolidate its holdings in India. It had also planned to buy payment company FreeCharge from Paytm. However last week, Axis Bank bought FreeCharge for about Rs 3.85 billion (US$ 60 million). Thus both deals have fallen through.
Apart from Softbank, the other prominent investors in Snapdeal include Ratan Tata, PremjiInvest — the personal investment arm of Wipro Chairman Azim Premji, China’s Alibaba Group and Foxconn Technology Solutions, among others.