Monday, 20 August, 2018

Flipkart acquires eBay India; all formalities completed

Ola founder Bhavish Aggarwal. Soft Bank is the largest investor in the Indian cab-hailing firm Ola founder Bhavish Aggarwal. Soft Bank is the largest investor in the Indian cab-hailing firm
Laurie Berry | 01 August, 2017, 16:58

Depleting cash reserves had dragged Snapdeal, whose stakeholders include Foxonn, Tencent, Blackrock and Ontario Teacher's Pension Fund, to a vulnerable position in the last few months. "The company has now chose to pursue an independent path and is terminating all strategic discussions as a result", Snapdeal spokesperson said in an emailed statement to PTI, without naming Flipkart. The talks have been plagued by quiet disagreement between the two sides, especially on the part of Snapdeal's founders who are reportedly concerned over the terms of the buy-out and payments to them and their early investors.

Bengaluru-based e-commerce marketplace Flipkart has appointed Goldman Sachs as an adviser for the proposed acquisition of rival Snapdeal, a financial daily reported. It later carried out a rebranding exercise, slashed its workforce and started serious talks with Flipkart for a sale.

Bahl from Snapdeal mentioned that the deal was pretty complex to execute. Snapdeal has sold its mobile wallet FreeCharge to Axis Bank for Rs 385 crore. The sale will hopefully provide the capital the two founders need to keep control of their company and boost Snapdeal market share. The company has now made a decision to pursue an independent path and is terminating all strategic discussions as a result. In the letter, they have said that with the ongoing streamlining of costs and sale of some of the assets, such as Freecharge, "we are financially self sufficient as a company and don't need to raise additional capital to reach profitability'".

E-commerce giant Flipkart on Tuesday successfully completed the merger with eBay India, PTI reported.

According to sources in Snapdeal, the company will go ahead with a new business model and will cut cost by reducing staff and stopping non-performing business.

Other strategic and institutional investors in Snapdeal are Ontario Teachers' Pension Plan, Foxconn, Temasek and BlackRock.

Germany Urges EU Retaliation Over US Sanctions on Russian Federation
A ministry statement set a September 1 deadline to "bring the number of diplomatic and technical staff at the U.S. European leaders say the sanctions will jeopardize their energy security and hurt their economies.

For now, Snapdeal can only move forward with its contingency plan to shift Snapdeal away from its selective merchant-centric platform to a Taobao-like open marketplace that could hopefully lure more users.

The company had briefly courted the idea of merging with Infibeam but did not make any substantial progress in this regard.

US companies like Amazon, Facebook Inc. and Uber Technologies Inc. have been expanding quickly in India, eager for a foothold in an internet economy that is growing as legions of people access the web for the first time, taking advantage of cheap smartphones and data plans.

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the USA print edition of The Wall Street Journal (August 1, 2017).

EBay itself failed against Flipkart and Amazon in India and it rolled its India business into Flipkart earlier this year with the USA parent putting in additional money into the homegrown e-tailer.

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