Snapdeal, the domestic ecommerce player, which is in discussions with Flipkart for a potential acquisition is also said to be in merger talks with Infibeam, one of the first entrants in the domestic ecommerce space. The company may also have put in a term sheet for Snapdeal, and valuing it at ~$1 billion. If the deal goes through, then Ahmedabad-based Infibeam and Gurgaon-based Snapdeal will combine to form a ~$2 billion entity to rival competition including Amazon and Flipkart.
One of the analyst tracking the deal said that “While Infibeam has a focus on business-to-business commerce, Snapdeal’s is a consumer-led online retail platform which is why this merger may bring in synergies in their operations. While Infibeam has given a term sheet, it’s not the end of the road for Flipkart”. Also, both the players can cross sell their products as the merchants are largely different.
Snapdeal is going through a rough patch with diminishing sales and investor confidence, and Softbank’s push for selling the firm. It is currently in talks with Flipkart, with the later expected to announce a revised buyout offer of ~$900 million for Snapdeal. It also has its logistics and payment arm which are not part of above deals for now.