Beleaguered online marketplace Snapdeal has called off talks for its merger with rival Flipkart+ , India's biggest e-commerce player. The Gurgaon-based Snapdeal said, it wants to pursue an "independent path".
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"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," a Snapdeal spokesperson said in a statement, without naming Flipkart. Snapdeal was in talks for selling its business to Flipkart in an estimated $900-950 million deal.
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Snapdeal said it expects to be financially self-sustainable by selling certain non-core assets. Last week, Axis Bank, India's seventh-biggest lender by assets announced that it has agreed to buy mobile payments wallet provider FreeCharge from Snapdeal for Rs 385 crore ($60.04 million).
Reuters/Representational Image
"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.
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Japan's Softbank, the largest investor in Snapdeal said that it respects the company's decision to pursue an independent strategy. "We look forward to the results of the Snapdeal 2.0 strategy, and to remaining invested in the vibrant Indian e-commerce space," a SoftBank spokesperson said. The Japanese conglomerate said supporting entrepreneurs and their vision is at the heart of SoftBank Chairman and CEO (chief executive officer) Masayoshi Son's and the company's investment philosophy.
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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.
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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 availability of affordable phones and data plans.
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