Flipkart High Price Acquisition Snapdeal Contends Amazon First Attempt Failed

India Edition

The so-called Flipkart Online Services Pvt. hopes to defeat the first attempt of Amazon.com Infotech (Ltd.) by swallowing one of its biggest competitors Snapdeal (Jasper Infotech Private Ltd.).

Snapdeal board of directors has refused Flipkart Online Services Pvt. to buy it.

Preliminary offer of business.

According to the news of a number of India media, the price of Flipkart Online Services Pvt. is about $7-9 billion, and it is unlikely to increase to more than $900 million, but Snapdeal is seeking a valuation of $1 billion.

The paction will not include Snapdeal's logistics business Vulcan Express and digital payment business FreeCharge.

According to the world clothing shoes and hats net, in May, Snapdeal published a Flipkart Online Services Pvt. account for its due diligence.

People familiar with the matter said that due diligence was "completely clean", so the offer of less than $1 billion was puzzling.

But the message stressed that the two sides will continue consultations, and it is expected that a deal can be concluded in the middle of this month.

At present, Flipkart Online Services Pvt. is the largest electricity supplier group in India, and Amazon.com Inc. Amazon and Snapdeal are following.

Bank of America Merrill Lynch Merrill Lynch said the market share of Flipkart Online Services Pvt. was 44%, while Amazon.com Inc. Amazon was 31%, but the latter could increase to 37% by 2019.

Alibaba Group Holding Ltd. (NYSE:BABA) is not available in China market.

JD.com, Inc. (NASDAQ:JD), Jingdong and Vipshop Holdings Ltd. (NYSE:VIPS) vip.com and other local giant Amazon.com Inc. Inc. Amazon will turn their eyes to India, which also has huge market space. In 2016, the local investment scale increased from 3 billion US dollars to US $5 billion, and the world's largest business group overtook Snapdeal last year.

The battle against the market has made the three giants still not profitable.

In the year to March 2016, their losses in the main emerging markets expanded to 93 billion 800 million rupees ($1 billion 400 million) in India.

Anup Vikal, chief financial officer of Snapdeal, said in March this year that it would achieve profits in two years. A month earlier, the group had just cut 600 employees, and Kunal Bahl and Rohit Bansal were also suspended.

Since its inception in 2010, Snapdeal has raised nearly $2 billion in total financing and gained the highest value of $6 billion 500 million when it raised $50 million in February 2016.

In recent months, SoftBank Group Corp. (9984.T), the largest investor in the stock market, accounts for about 35% of the shares. Softbank has been promoting the merger with Flipkart Online Services Pvt., but some investors and two founders are hoping to get higher quotations.

SoftBank Group Corp. Softbank, which has invested $5 billion in India, is also the shareholder of the largest digital payment start-up company Paytm E-Commerce Pvt. and India Ola Uber.

Softbank founder Sun Zhengyi expects investment in e-commerce and technology in India to replicate Alibaba's success. However, in February of this year, Softbank disclosed that investment valuation of Snapdeal and Ola declined by 39 billion 300 million yen, or about 353 million US dollars.

Chinese capital will not miss the India market.

Alibaba and Hon Hai Technology Group (Foxconn) both participated in Snapdeal's $500 million financing in 2015, and Alibaba held about 3%.

At present, Alibaba and ant gold clothing already hold a stake of Paytm E-Commerce Pvt. Ltd. 62% valued at US $1 billion. Last year, the Paytm parent company One97 Communications Alibaba and ant gold clothing valued at $4 billion 800 million also share 40% of the total. Paytm said that its electronic wallet service has more than 200 million users in India.

India commercial newspaper "Mint" said Paytm E-Commerce Pvt. Pvt. is planning to buy FreeCharge of Snapdeal with us $4000-5000, which is at least 87.5% less than the US $400 million purchase price of Snapdeal 2015 in April.

Alibaba also penetrated India market through UCWeb Inc. UC browser.

As for Flipkart Online Services Pvt., it attracted the Tencent Holdings Ltd (0700.HK).

The latter combined Microsoft Corp. NASDAQ:MSFT (NASDAQ:MSFT) Microsoft and eBay Inc. (NASDAQ:EBAY) in April to inject Flipkart Online Services Pvt. into 1 billion 400 million dollars to create the largest financing in the history of India startups.

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According to sources, Softbank also plans to inject $1 billion into Flipkart Online Services Pvt., and buy lower sub shares from two main investors, Flipkart Online Services Pvt., the largest investor Tiger Global Management, tiger Global Fund and South Africa's largest investor.

Flipkart Online Services Pvt., founded in 2007, has carried out 11 rounds of financing, amounting to $4 billion 500 million, and its financing in April this year gave us a valuation of $11 billion 600 million, a significant contraction of 23.7% compared with 15 billion 200 million US dollars in September 2015.

The group was restructured in January. Kalyan Krishnamurthy, former executive of Tiger Global Management LLC tiger Global Fund, was appointed chief executive.

Flipkart Online Services Pvt. has expanded and consolidated its position through mergers and acquisitions in recent years. In 2014 and July 2016, the Group acquired two major fashion businesses in India, Myntra Designs Private Ltd. Ltd. and Jabong (Xerion Retail Jabong), and bought its India business in July 2016 this year as part of the financing paction.

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