Amazon Offers $70-80 Million For Freecharge; Snapdeal Founders Now Want Infibeam To Acquire Them
The latest bid for Freecharge has come from Amazon, which is pegged at $70 to $80 million. This is more than what Axis Bank is ready to offer. But, Snapdeal founders are keen to go with Infibeam
Latest developments in the Indian eCommerce mergers and acquisition space has turned up the heat and demolished several pre-conceived notions.
In a major twist, Snapdeal founders have indicated that instead of Flipkart, they want Infibeam to acquire them. We try to explore reasons behind this change.
Meanwhile, in another major development, Amazon India has expressed strong desire to acquire mobile wallet Freecharge, which is again very surprising. But what inspired Amazon to take this step?
Are these two developments: Snapdeal-Infibeam and Amazon-Freecharge acquisition are inter-related?
Snapdeal Founders: Infibeam, Not Flipkart Should Acquire Us
It seems that there is a major cold-war brewing up within Snapdeal Board of Directors.
As per reports coming in, Snapdeal co-founders Kunal Bahl and Rohit Bansal have indicated that Infibeam should acquire them, rather than Flipkart.
On the other hand, SoftBank, which is the major shareholder in Snapdeal, wants Flipkart to acquire Snapdeal.
This is the yet another new shift in direction, after venture capital (VC) firms Nexus Venture and Kalaari Capital locked over the valuation angle and postponed the possible merger of Snapdeal with Flipkart.
Infibeam is the only listed eCommerce firm from India, as they earlier raised Rs 450 crore via IPO route, at a valuation of Rs 2230 crore. They had earlier placed a bid of $700 million for Snapdeal, which is less than Flipkart’s bid of $850 million.
Now, the question arises why Snapdeal founders want Infibeam to acquire them?
As per some reports, the co-founders are aware that in case Flipkart acquires them, they will have to leave the company, while Infibeam wants them to continue.
Another set of reports indicates that Snapdeal co-founders have a Plan B, as well, wherein they plan to further cut jobs, reduce the overheads, and continue managing Snapdeal as an independent entity.
Will this factor affect the negotiations with Flipkart?
Amazon Wants To Acquire Freecharge
In another major twist to the saga of mergers and acquisitions within Indian eCommerce space, Amazon India has placed a bid of $70-80 million to acquire Freecharge.
This new bid has come at a later stage, especially after Axis Bank is the top contender for acquiring Freecharge, at a valuation of $60-65 million.
Considering that Amazon has placed a bid which is higher than Axis Bank’s bid, clearly, showcases that really want to acquire Freecharge now.
The answer may lie in Amazon India’s initiatives and plans related to their Amazon Pay service.
After Amazon India received RBI approval for their E-wallet, they are now directly pitched against Paytm and MobiKwik, along with Freecharge.
Acquisition of Freecharge will no doubt, enable Amazon India to launch their wallet services as a separate entity and grab some market share.
Note here, that Amazon has refused to comment on this development, and have issued a statement saying, “We don’t comment on rumours and speculations.”
Interestingly, if Amazon acquires Freecharge, then the pressure over Snapdeal to get acquired will also, somewhat reduce.
We will keep you updated as we receive more information…