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Term-sheet for Flipkart's Snapdeal acquisition signed

The process of selling Snapdeal to Flipkart has started

Karan Choudhury  |  New Delhi 


The process of selling marketplace company to has started.

According to sources close to the deal, three months after SoftBank, the player’s largest investor, floated the idea before the board, Flipkart, the Bengaluru-based marketplace major, started the process of due diligence last week.

While the term-sheet was not signed last week, sources said the process of due diligence was given the go-ahead after Snapdeal’s board of directors agreed unanimously to Japanese telecom major’s proposal to sell the beleaguered player.

“Once the due diligence started, signing the non-binding term-sheet was nothing more than a formality. It was, however, signed on Tuesday and is in the process of looking at the financials of the company,” said a source close to the board.

It is a matter of another week before completes the process and after that the of the two would start.

The countdown for the closure of the Gurgaon-based online marketplace began soon after the board signed the non-binding term-sheet, giving the official go-ahead to start proceedings to sell to Tiger Global-backed

SoftBank, in an email reply to the query, said it would not comment on the details of the negotiations.

Flipkart, led by Sachin and Binny Bansal, does not plan to keep the brand alive. According to sources close to the board, unlike Myntra and Jabong, which are being run independently under Flipkart’s umbrella brand, Snapdeal's journey is likely going to end within a year of the

Snapdeal, whose valuation came down from $6.5 billion to less than a billion in the past one year, had to let go of a major chunk of its employees. 

Nexus Venture Partners, another investor in Snapdeal, could get close to $80 million and a stake in the merged or new entity, while Kalaari, a third investor, could get $70-80 million.

co-founders Kunal Bahl and Rohit Bansal would get around $60 million for their 6.5 per cent stake in

A non-binding term-sheet to start due diligence by for is expected to be signed in the next few days between the two parties.

Meanwhile, Snapdeal’s online wallet company, Freecharge, has signed a non-binding term-sheet with Paytm, which is interested in acquiring the company. According to Paytm, it will buy the company only if it adds enough value to the merchant base and is priced correctly.