Electronic commerce firm Snapdeal has called off merger talks with rival Flipkart, reported PTI on Monday. Snapdeal will pursue an independent path to continue its operations instead, a statement said.
Snapdeal said it is exploring a new direction, which it called Snapdeal 2.0, and claimed it had made a gross profit this month. “The company is terminating all strategic discussions as a result.”
Snapdeal also said it had sold off some non-core assets, which would help it remain financially viable.
Snapdeal’s largest investor SoftBank also issued a statement. “Supporting entrepreneurs and their vision and aspirations is at the heart of Masayoshi Sons’ and SoftBank’s investment philosophy,” a SoftBank spokesperson said. “As such, we respect the decision to pursue an independent strategy. We look forward to the results of the Snapdeal 2.0 strategy, and to remaining invested in the vibrant Indian e-commerce space.”
The two companies had struck a preliminary agreement in June. The deal was meant to slow down rival company Amazon’s growth in India. Flipkart’s acquisition plans hit a snag after the family of Wipro chief Azim Premji, which happens to be one of the smaller investors in Snapdeal, objected to special payments to certain shareholders including its two co-founders and two larger investors.