Showing posts with label internet. Show all posts
Showing posts with label internet. Show all posts

Snapdeal-Flipkart Deal: Negotiations Said to Be Continuing for Higher Offer


After Snapdeal's board reportedly rejected Flipkart's $850 million (roughly Rs. 5,505 crores) takeover offer, the two parties are now holding parleys over the $150-200 million valuation gap.

According to sources privy to the development, Flipkart had initially offered $1 billion (roughly Rs. 6,476 crores) for the deal but post the due diligence, it made an offer for $800-850 million.

The offer was rejected by Snapdeal's board as it felt the amount undervalues the company as the due diligence report is clean, one of the sources said.

"However, the deal isn't off and negotiations will continue. The differences over Snapdeal's valuation could delay the process," they added.

Emails sent to Snapdeal, SoftBank and Flipkart did not elicit response.

SoftBank, Snapdeal's largest investor, has been proactively mediating the sale for the past few months. The board also has representation from Snapdeal founders (Kunal Bahl and Rohit Bansal), NVP and Kalaari Capital.

EY, which was roped in by Flipkart to conduct a due diligence on Snapdeal, submitted its report a few days ago, following which the offer was made.

The deal between Snapdeal and Flipkart, if completed, would mark the biggest acquisition in the Indian e-commerce space.

One of the leading contenders in the Indian e-commerce space, Snapdeal has seen its fortunes falling amid strong competition from Amazon and Flipkart.

Compared to a valuation of about $6.5 billion in February 2016, the sale to Flipkart could see Snapdeal being valued at a much lower level.

SoftBank has already written off over $1 billion on valuation of its investment in Snapdeal.

The deal has been in works for a few months now. SoftBank saw initial hiccups in bringing early investors - Nexus Venture Partners and Kalaari Capital - on board with the sale proposal. However, these firms later agreed to the proposal.


But, PremjiInvest - an investor in Snapdeal that does not have board representation - has recently written to the company seeking greater clarity on the terms and sought equal treatment of shareholders for payouts from the deal.

Amazon Invests Rs. 1,680 Crores More Into India Unit to Strengthen Operations

Global giant Amazon has invested an additional Rs. 1,680 crores in its India unit as it looks to further strengthen operations in the booming e-commerce market here.
The fresh infusion - part of Amazon's  $5 billion commitment to Indian market - will also provide more arsenal to the Indian entity that is locked in an intense battle for leadership with local rival, Flipkart.
Amazon Seller Services (Amazon India) received the funds last month, as per regulatory filings with the corporate affairs ministry.
"We remain committed to our India business with a long-term perspective to make e-commerce a habit for Indian customers and invest in the necessary technology and infrastructure to grow the entire ecosystem," an Amazon India spokesperson said in an e-mailed response.
In June last year, the US-based firm had said it will invest an additional $3 billion in India, topping up the company's earlier stated investment of $2 billion.
Amazon India is estimated to have already received over $2 billion in funding.
Amazon India, which has recently completed four years of operations, has said it will continue to invest in expanding infrastructure and bringing in solutions to enhance consumer and seller experience in the country.
Amazon founder Jeff Bezos has already highlighted the importance of the Indian market to its operations.
With Tiger Global-backed Flipkart raising $1.4 billion earlier this year, the competition is intense and the rivals are already believed to be gearing up for the festive season.
These investments are being directed towards building warehouses, strengthening logistics and increasing product assortment.
Besides, significant money is being invested in marketing and promotions by the e-commerce players.
Source: - http://gadgets.ndtv.com/internet/news/amazon-india-investment-strengthen-operations-1721447

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