Snapdeal rejects Flipkart takeover offer to fight alone in India

Bangalore, India - Snapdeal rejected an acquisition bid from rival Flipkart Online Services Pvt, saying it will compete alone in India’s ecommerce market.

Snapdeal, which said it will sell off some non-core assets, is set to post a gross profit this month, the startup said in an emailed statement on Monday.

SoftBank Group Corp, which has almost a third of Snapdeal shares, and Tiger Global Management, which holds a substantial stake in Flipkart, had been pushing the two competitors to merge so they can create a stronger local company to fend off Amazon.com Inc. SoftBank abandoned the effort after trying to negotiate the deal, said people with knowledge of the matter, who asked not to be identified.

‘We respect the decision to pursue an independent strategy’, SoftBank said in a statement. ‘We look forward to the results of the Snapdeal 2.0 strategy, and to remaining invested in the vibrant Indian ecommerce space’.

Flipkart had offered about US$950mn, but Snapdeal cofounders Kunal Bahl and Rohit Bansal, as well as other board members, had been at odds on how to proceed, people with knowledge of the discussions said last week. Snapdeal and Flipkart have a history of animosity born from years of competing as the two largest local players in India’s expanding ecommerce market. Jasper Infotech Pvt owns the Snapdeal brand.

‘Snapdeal has been exploring strategic options over the last several months’, the company said. ‘The company has now decided to pursue an independent path and is terminating all strategic discussions as a result’.