Flipkart and Myntra merger is a done deal. India’s big daddy Flipkart has acquired 100% stake in fashion and lifestyle e-retailer Myntra. The exact amount of the deal is not disclosed by either of the companies, but as per few reports it might be more than $300 million (Rs. 2000 crore approx.).
It is a 100 per cent acquisition and going forward, we have big plans in this segment. Flipkart and Myntra are getting together to create one of the largest e-commerce stories and together we will dominate the market,
said Flipkart co-founder and CEO Sachin Bansal.
Even after the acquisition, both companies will continue to run as separate and independent entities with no change in structure, employees and functioning. Sachin said that Flipkart will invest US$100 million (around Rs 600 crore) in its fashion business in the near-term. Mukesh Bansal from Myntra is going to join the Flipkart board as a part of deal and head the fashion division at Flipkart.com.
The Indian e-commerce market is estimated to be worth about $3 billion (Rs. 18,000 crore). Flipkart’s annualised sales crossed $1 billion (over Rs 6,100 crore) a year ahead of target. The move comes from Flipkart as it faces tough competition from rivals like eBay, Snapdeal and especially Amazon. Started as a book e-tailer in 2007, Flipkart gradually snowballed into a full-fledged e-commerce behemoth by expanding to categories like electronics, home decor, fashion apparel and lifestyle.
The transaction is said to have been initiated by common investors, Tiger Global Management and Accel Partners, which are understood to own majority shares in both the companies.