Snapdeal board approves Flipkart's acquisition offer

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Snapdeal board approves Flipkart's acquisition offer

Reportedly, early investors, Nexus Venture Partners (NVP) and Kalaari - who also have Board representation - could receive payouts worth over Dollars 150 million once the deal with Flipkart is closed.

Private sector lender Axis Bank is in final stages of acquiring Snapdeal's digital wallet platform -FreeCharge in a $60 million deal, people aware of the matter said.

Axis Bank did not immediately respond to a request for comment. From the day of the signing of Term Sheet, the deal is likely to be completed within three months.

To remain an independent entity, Snapdeal will cut jobs by nearly 90 per cent and reduce the size of its business, the source added.

Snapdeal, which has been struggling to decide about its future, has reportedly made its decision. In the last stage, Flipkart will merge with Snapdeal.

Snapdeal and Flipkart board are expected to meet this week to sign the Term Sheet and finalise the deal.

E-commerce leader Flipkart is reported to have finally agreed to the $900-950 million price that smaller rival Snapdeal has asked for a merger deal and the two are now expected to seek shareholders' approval for the merger that would create a bigger rival for global e-tailer Amazon's India operations.

The swap ratio of the deal is likely to be finalised by Flipkart in its board meeting on Friday. Its earlier offer of ₹5500 crore was reject by the board. Despite being valued at $60 million, this cut-price deal marks a significant erosion of value for the payments arm of Snapdeal.

One of the leading contenders in the Indian e-commerce space, Snapdeal has seen its fortunes failing amid strong competition from Amazon and Flipkart. All the subsidiaries of the company are up for sale, but not included with the Snapdeal.

SoftBank has written off over $1 billion on valuation of its investment in Snapdeal after its valuations plummeted from about $6.5 billion in February 2016.

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