SoftBank push­ing to seal Flip­kart-Snapdeal merger

New Straits Times - - Business -

MUM­BAI: Af­ter plough­ing about US$2 bil­lion (RM8.68 bil­lion) into mi­nor­ity stakes in In­dian e-com­merce busi­nesses over the past years, Ja­pan’s SoftBank is up­ping the stakes, look­ing to play con­sol­ida­tor and take a more ac­tive role at a trio of lead­ing start-ups.

Ac­cord­ing to sources, the so­lar-to-tech con­glom­er­ate is seek­ing to se­cure a piece of In­dia’s in­dus­try lead­ers in ev­ery­thing from pay­ment sys­tems to on­line shop­ping and gro­ceries, in a se­ries of deals that would shake up the US$65 bil­lion sec­tor.

Among the most high-pro­file plans is SoftBank’s push to en­gi­neer a merger be­tween Snapdeal, the No. 3 player in one of the world’s most com­pet­i­tive on­line mar­kets and one of its big­gest In­dian investments to date, and mar­ket leader Flip­kart.

The deal could be fi­nalised as soon as next week, said sources.

SoftBank has poured roughly US$1 bil­lion into Snapdeal since 2014, but com­pe­ti­tion in e-com­merce has risen dra­mat­i­cally with United States gi­ant Ama­ crank­ing up its pres­ence and tak­ing the No. 2 spot from Snapdeal.

Be­sides Snapdeal, SoftBank is also close to fi­nal­is­ing a cash in­fu­sion of more than US$1 bil­lion into Alibaba-backed dig­i­tal pay­ments firm Paytm — an­other leader in a highly com­pet­i­tive sec­tor — giv­ing it a more di­rect say in that group too, ac­cord­ing to one source.

Me­dia re­ports have sep­a­rately linked SoftBank to a tie-up be­tween gro­cery de­liv­ery group Gro­fers, in which it has in­vested roughly US$70 mil­lion, and mar­ket leader and ri­val BigBas­ket.

At the heart of the push was Masayoshi Son, SoftBank’s founder and chair­man, said the sources. Son has taken a more ac­tive role in the group since last year, when he pushed aside his heir ap­par­ent, Nikesh Arora.

SoftBank is best-known for its lu­cra­tive early stage bet in Chi­nese e-com­merce gi­ant Alibaba Group.

“Son is think­ing In­dia is the place where he will cre­ate one or two Alibabas,” said one of the sources fa­mil­iar with SoftBank am­bi­tions, adding that Son saw the coun­try right now as the “land of golden op­por­tu­nity”. Reuters

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