Snapdeal moves closer to acquiring ShopClues in all-stock deal
Category: #retail  By Pankaj Singh  Date: 2019-05-23
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Snapdeal moves closer to acquiring ShopClues in all-stock deal

Snapdeal, an Indian e-commerce company, is close to buying its rival ShopClues, in an all-stock deal. The deal is about to mature after talks fell through several times previously, due to disagreements on financial terms. If the merger goes through as planned, ShopClues investors are likely to get 1 Snapdeal share for every 9 shares they hold, adding 10% stake in the combined entity, cite sources familiar with the matter.

Reportedly, the deal is expected to be a cent percent buyout with all ShopClues investors, including Helion Venture Partners, Singapore’s sovereign wealth fund GIC, Tiger Global, Unilazer Ventures and Nexus Venture Partners, rolling into Snapdeal. The founders of ShopClues, Sanjay Sethi and Radhika Aggarwal might get a small cash exit as a part of the deal. The due diligence is in process and a final decision can be expected soon.

If the deal materializes, it is expected to consolidate the long-tail e-commerce market, which has mainly been catering small town customers, away from core audience of established companies in the field like Amazon and Flipkart.

As per credible sources, ShopClues Network has raised $250 million so far and has also seen its business deteriorate in the last year, relegating it to 5th position on the Gross Merchandise Value or GMV chart. Companies in the e-commerce logistics space have claimed that ShopClues was hardly executing any orders recently. The executives in logistic industry also claim that ShopClues has become a credit risk to carry on a business with.

ShopClues’ mobile web traffic has also fallen to 11 million in April 2019 from 16 million in November 2018 while Snapdeal’s mobile web traffic rose to 82 million from 68 million, during the same duration. ShopClues has however, reduced losses from Rs 210 crore (2017-18) to less than Rs 45 crore (2018-19).

Snapdeal’s Co-founder and Chief Executive Officer, Kunal Bahl did not respond to queries. A ShopClues spokesperson said that the company refrains from commenting on market rumors.

Source credit:  https://economictimes.indiatimes.com/industry/services/retail/snapdeal-inches-closer-to-acquiring-shopclues/articleshow/69437440.cms



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Pankaj Singh

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Pankaj Singh

Pankaj Singh Develops content for Market Size Forecasters, Algosonline, and a couple of other platforms. A Post Graduate in Management by qualification, he worked as an underwriter in the UK insurance domain before deciding to switch his field of profession. With exp...

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