Indian ecommerce major Flipkart has acquired the global ecommerce major eBay’s India operations. As part of the deal, eBay will make a $500 million cash investment in return for an equity stake in Flipkart and sell its business to it.
It has also raised a total of $1.4 billion from Tencent, eBay and Microsoft. This makes it the largest fund raising round in the Indian ecommerce market
Once the transaction is closed, eBay will be operated as an independent website managed by Flipkart. Additionally, both companies have also entered into an exclusive arrangements to jointly pursue cross-border trade opportunities. This will make eBay’s global inventory accessible to Indian customers. Also, all of eBay’s buyers across the globe will be able to access Flipkart’s inventory in India.
Speaking on the acquisition, Devin Wenig, CEO of eBay said, “The combination of eBay’s position as a leading global eCommerce company and Flipkart’s market stature will allow us to accelerate and maximize the opportunity for both companies in India.”
Binny Bansal, Group CEO, Flipkart said that coming together of both companies bodes well for both Indian and global customers and sellers. “This partnership between Flipkart and eBay is the coming together of two pioneering innovators who have disrupted commerce by applying technology. eBay.in has built a strong presence in India over the years and we hope to take it to greater heights as part of the Flipkart group,” he added.
The transaction is expected to close later this year. And once the transaction is closed Flipkart will acquire all of eBay’s buyers in India and eBay will remove the number of active buyers in India from its reporting during the quarter in which the transaction closes. eBay says that it does not expect this transaction to have a material impact on its guidance provided on January 25, 2017.
This also comes at a time when Flipkart is in talks to buy Snapdeal. With the acquisition of eBay, the homegrown ecommerce major will race ahead of Amazon to become India’s largest ecommerce player