For about six months negotiations were going on between e-commerce giants Flipkart and Snapdeal, where the latter was all set to merge with the former. Talks took a major turn last week when the board of directors officially gave their nod, approving this merger to take place. However, the final decision still lay in the hands of the investors. However, in a strange turn of events, all further meetings regarding the merger have been called off and the companies are no longer expected to merge.
Why Was the Merger Called Off?
The merger between Flipkart and Snapdeal was all set to be decided in a meeting that was to take place in Bangalore today and tomorrow. However, reports from Economic Times state that both these meetings have now been called off. This news breaks just days after Axis Bank acquired Freecharge, a digital payments platform owned by Snapdeal.
“Snapdeal has been exploring strategic options over the past 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.
“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. In addition, with the sale of certain non-core assets, Snapdeal is expected to be financially self-sustainable” the spokesperson added.
Flipkart had made their initial bids a few months ago. Following that deal being rejected, the company once again offered a bigger merger, where Snapdeal was to get $850-900 Million. However, it looks like even that merger prospect is no longer in sight and it has all been called off as Snapdeal looks forward towards more ambitious business. Interestingly, in the US, Softbank owned Sprint, one of the mot popular US Carriers is eyeing to merge with charter.