Snapdeal would rather launch a Snapdeal 2.0 than merge with Flipkart

Snapdeal would rather launch a Snapdeal 2.0 than merge with Flipkart

Snapdeal would rather launch a Snapdeal 2.0 than merge with Flipkart

Snapdeal and Flipkart didn't respond to emails seeking comment.

The statement assumes significance as some reports had said that Ratan Tata has already approved the deal. "There will be a decision by tonight", the spokeswoman said.

SoftBank, which claims around 33% of the organization, likewise discharged an announcement before on Monday.

Snapdeal had 9,000 employees in July last year- the number was brought down from 9,000 to 1,200.

Though Snapdeal's founders were not looking to sell the company to Flipkart, SoftBank, which had written of $1 billion of its investment in the company, was pushing for the sale of the company.

SoftBank was slated to invest an additional $1 billion through a mix of primary and secondary purchases of shares in Flipkart, in addition to merging Snapdeal with the firm, to bag a 15-20% stake and ensure a seat on the board of the ecommerce market major.

Forbes India was the first to report the development in its online edition dated July 27, 2017 that Bahl and Bansal were not keen on the deal, and that with FreeCharge's (its wholly owned payments subsidiary) sale to Axis Bank, the transaction may hit a roadblock.

Till date, the co-founders, as well as Snapdeal's early-stage investors, have been upset with the way SoftBank has marked the valuation to a sixth of what it was past year.

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The Flipkart-Snapdeal merger which had dominated headlines since the last couple of months has fallen apart.

Flipkart had initially offered around $750 million for the deal, which was rejected by the Snapdeal's board.

However, there are three major problems holding up the deal.

Just a few days ago, Snapdeal was also reportedly in talks with e-commerce Infibeam as both co-founders could possibly have a higher control in the entity, unlike with Flipkart in which both would have had minimal or zero significance.

An official statement issued by Snapdeal stated that the company "has been exploring strategic options over the last several months" but had now chose to "pursue an independent path and is terminating all strategic discussions as a result", without naming Flipkart.

Before that, PRemji Invest, one of the smaller stakeholders in Snapdeal objected to the deal over its structure and the special payout of an approximate $90 million to the second largest investors Kalaari Capital and Nexus Venture Partners.

SoftBank's funding of Flipkart in limbo? However, the founders have postponed the merger for the last two months citing various reasons.

"It certainly has impacted SoftBank's plan but it should still happen", said one person. Mint couldn't ascertain what exactly these obligations are. Law firm J Sagar Associates and banker Credit Suisse, which are representing Snapdeal in the negotiations, were to meet Khaitan & Co and Goldman Sachs.

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