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The two companies were at loggerhead over the acquisition terms comprising the subsidiary firms of Snapdeal. Finally, the suspense has come to an end. Flipkart-Snapdeal acquisition saga has come to fruition. As Snapdeal has reportedly accepted the Flipkart’s offer of $900-$950 million.
The Snaldeal board has approved the Flipkart’s offer of $900-$950 million for the acquisition. The sources close to the deal have told CNBC-TV18. The final phase of the acquisition will be over when the shareholders would give their final nod.
Infibeam is not going to be part of the deal.
On July 17, Flipkart had sent a revised offer to Snapdeal, which didn’t include subsidiaries. These firms are FreeCharge, Vulcan Express and Unicommerce. Amazon too had shown its interest in FreeCharge lately.
Flipkart and Snaldeal board members will meet soon to finalise the deal and sign on the Term Sheet.
The deal will take place in three parts. In the first part, SoftBank will buy out the stake from Snapdeal and all its investors. The capital gained will go into Flipkart through SoftBank. Flipkart will merge with Snapdeal in the final stage.
The swap ratio of this deal will receive its final nod from the Flipkart investors on Friday. Almost 3 months is needed for the deal to complete.
SoftBank will hold 20% of the total stake in the final combined firm. Moreover, Flipkart will use Snapdeal brand name for the initial phase of operations.
The sale of FreeCharge will also take place soon. Further, the Flipkart-Snapdeal acquisition saga was in trouble due to the sale of subsidiary firms and a lower valuation than expected.
Earlier this month Flipkart had disrupted the Sanpdeal’s unicorn status by offering $400-million. Therefore, Snapdeal refused the offer. Moreover, Snapdeal was looking at other options which would make it possible to sell itself at unicorn valuation. Both the founders at Snapdeal were in constant meetings with other senior executives in subsidiary firms to come with a plan to help sail the deal. At last, it has successfully gone through.
