Two of the biggest players in the Indian E-Com scenery have finally become one to take on the big daddy that Amazon is in the same vertical. Talks had reportedly started back in January for the acquisition, but it was not until as recent as March 2014, when a couple of common investors namely, Accel Partners and Tiger Global pushed for the deal that the talks gained pace.
The deal would allow Flipkart to expand big into the fashion retail space, one where they have not been able to grow big enough. The value of the deal has reportedly been reached in cash and stock options combined from Flipkart’s end. Flipkart has made it clear that the acquisition is for scale and not for cost or killing the competition in the market. Both the companies will continue to independently function the way they are currently with no major changes on the horizon anytime soon.
Flipkart is also reportedly committed to investing over $100 million in Myntra in future. As a result of this acquisition, Myntra CEO Mukesh Bansal will be added to the Board Members of Flipkart. The acquisition will be a 100% acquisition of Myntra though there will be no changes in posts or positions of any employees. The deal will see Flipkart and Myntra account for 50% market share in the E-Com retail fashion space.