Bangalore-based Indian online e-commerce website Flipkart is all set to merge with another e-commerce company in India, SnapDeal. Although the deal is yet to come out in the open and there are mere speculations going on, it must be noted that similar merger talks are also round the corner between Snapdeal and Paytm.
The first question that many might be asking, would be, why exactly would Flipkart merge with SnapDeal, which is a potentially smaller rival and also when the smaller company is facing some heavy losses? Well, the reason behind the same might be that the merger will help Flipkart get a potential investor in the company, in the form of Japan’s Masayoshi Son-led SoftBank Group Corp.
According to sources, the Bengaluru-based company has already hired Goldman Sachs for the merger talks between the two companies. It is also reported that the investment banking company will work closely with the SnapDeal advisors, Credit Suisse to come to a conclusion of the merger between the two companies. The merger, if carried out successfully, will be the largest merger in the history of e-commerce companies in India.
Flipkart is one of the companies who has been a part of the e-commerce websites in India for quite some time now. They are well known for the Flipkart promotional offers. SnapDeal, on the other hand, had a rough path in the middle when a fraction of the Indian public had mistakenly the company for SnapChat. However, SnapDeal offers such as Dil ki Deal too have been among the favorites for the Indian public.
However, it must be noted, that the largest investors of Snapdeal, the SoftBank Group is also keeping its options open for the merger with Paytm. According to sources, it is possible that the two companies might be looking for an all-share merger. The Alibaba group backed wallet company is seeking to get financial help from the SoftBank Group. It is also speculated that the Japanese company, might be helping Paytm with $1 billion after taking equity in the company for the same.