Merger And Acquisition Deals Worth $2.1 Billion Inked In The E-Commerce Industry In 2017

Merger and acquisition deals worth $2.1 billion were inked in 2017 in the Indian e-commerce industry, Economic Times has reported.

According to the report, at least 21 major deals were signed with participation from players like Paytm and Flipkart. However, this was lower compared to 2016. Deals worth $2.2 billion were inked in 18 different transactions that year.

In the first four months of the current fiscal year, six transactions worth $226 million have been registered. This year, however, could be largest so far in the Indian e-commerce market if the Walmart-Flipkart deal goes through.

The Walmart and Flipkart deal, in which the former will buy up to 75 per cent stake in the latter along with Google parent Alphabet, is likely to be announced by the end of this week, Reuters reports. While Alphabet is likely to acquire 15 per cent stake for around $3 billion, Walmart may buy up to 60 per cent state for $10-12 billion.

SoftBank Group, Flipkart’s largest investor, is expected to completely exit. It had invested close to $2.5 billion last year. Other major Flipkart investors - Tiger Global and Accel - will sell a majority of their stakes. One of the founders of the e-commerce giant, Sachin Bansal, is also likely to exit Flipkart after the deal is sealed.

“We expect Walmart to be in this journey with Flipkart (if the deal does goes through) for the long haul and the one where both parties join hands to bring expertise. To give context – Walmart has been sourcing directly from farmers; has great depth in supply chain management warehousing operations – solid pluses for Flipkart,” Greyhound Research Chief Analyst and CEO, Sanchit Vir Gogia said.