The online food aggregator Zomato has reportedly signed a merger deal with the instant delivery service company Blinkit, former Grofers, and the deal is expected to be an all stock one, likely to have a valuation of $700 million.
According to sources, Zomato will approach the competition regulator Competition Commission of India for getting the approval for the Blinkit deal soon.
Details on the ‘all stock’ deal between Zomato and Blinkit is given below.
Zomato-Blinkit Merger
The market listed company Zomato has signed a merger agreement with Blinkit in an all stock deal, attracting a valuation likely at $700 million, cited a Moneycontrol report.
Zomato will be approaching the CCI for getting an approval on the same.
Also, once the stock swap is done, Softbank, which is the lead investor of Blinkit, will own a 4% stake in Zomato. Softbank is also an investor in Zomato’s rival company Swiggy.
The food delivery company could extend a loan of upto $75-$100 million to the beleaguered company Blinkit, as the latter has laid off about 5% of its entire strength since the Covid-19 pandemic has started.
The company has fired staff members from its regions including Mumbai, Hyderabad and Kolkata, across different segments like delivery riders, pickers and store managers.
At present, the company has more than 2,000 employees on payroll and about 30,000 on ground staff, noted the report.
The said deal between the two new-age digital company comes at a time when Blinkit has not only fired a large number of employees but also delayed on paying some vendors and shut its stores, in the heat of losses and growing competition in the quick commerce space.
In July 2021, Zomato made an investment in Blinkit for acquiring a stake of 10% for a valuation of $1 billion. This was right ahead of Zomato’s IPO launch on the Indian exchanges.
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