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Snapdeal won’t sell to Flipkart, to run on its own

LiveMint logoLiveMint 31-07-2017 Mihir Dalal

Bengaluru: Snapdeal, run by Jasper Infotech Pvt. Ltd, has walked away from talks to sell itself to Flipkart and the struggling online marketplace will now try and survive as an independent entity by selling assets and cutting costs.

The decision to end discussions with Flipkart marks a big win for Snapdeal founders Kunal Bahl (CEO) and Rohit Bansal (chief operating officer), both of whom were against the sale to their sworn enemy Flipkart from the start. Bahl and Bansal have won the bitter boardroom battle against Snapdeal’s largest investor SoftBank Group Corp, which was pushing for the sale to Flipkart.

“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,” a Snapdeal spokesperson said in a statement.

A SoftBank spokesperson said the company would “look forward” to the results of Snapdeal’s new plan.

“Supporting entrepreneurs and their vision and aspirations is at the heart of Masayoshi Son’s and SoftBank’s investment philosophy. As such, we respect the decision to pursue an independent strategy. We look forward to the results of the Snapdeal 2.0 strategy, and to remaining invested in the vibrant Indian e-commerce space,” the spokesperson said in a statement.

Mint reported on Monday that the proposed Snapdeal sale to Flipkart may be called off as the founders and shareholders of the struggling online marketplace have not yet agreed on the terms of the deal.

Last week, it seemed like the on-again-off-again Flipkart-Snapdeal merger would finally be completed. On 26 July, the board of online marketplace Snapdeal gave the go-ahead to the company to continue negotiations to sell itself to Flipkart, which had increased its buyout offer to $850 million two weeks ago. But over the weekend, Snapdeal and Flipkart cancelled a key meeting that was scheduled for Monday to continue negotiations over the deal.

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