As per definite confirmation and speculations Flipkart, India’s largest e-commerce store is buying Myntra.com which is India's biggest online apparel store. As per BusinessWeek the announcement of acquisition is expected as early as this week.
The deal of Myntra acquisition is expected to be around $330 million and its shareholders will get a combination of cash payouts and stakes in Flipkart. Flipkart has decided to acquire Myntra so as to defend itself from Amazon threat in India and fetch a larger share of the India's online retail market. Although it is not yet clear as if Flipkart will acquire only the Myntra brand or its overall operations.
According to another source the size of the deal will be around Rs.1,800-2,000 crore and the acquisition news is scheduled to be announced on Thursday.
India has around Rs.62,000 crore e-commerce market and by 2019, only the electronics and fashion segment will account for 30 per cent of the sales in the online e-commerce space, as per Technopak Advisory report.
If the Myntra acquisition deal will get finalized, the deal will be biggest acquisition by any Indian e-commerce company and at the same time biggest sell out of any Indian online store i.e. Myntra.
The transaction is said to have been initiated by common investors that are - Tiger Global Management and Accel Partners, which are understood to own majority shares in both Flipkart and Myntra.
Sources say that while Sachin and Binny, who our founders of Flipkart own less than 10 per cent of Flipkart while Mukesh Bansal founder of Myntra owns around 6-7 per cent in Myntra. The deal could also see an exit by a few investors in Myntra.
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