Everyone in the Indian ecommerce sector was taken by surprise yesterday when the news broke out that Ahmedabad-based Indian internet and e-commerce conglomerate, Infibeam was involved in merger talks with the currently on sale, troubled e-commerce site, Snapdeal. It was even reported that Infibeam has even furnished a term sheet, which valued Snapdeal at USD 1billion, which was the initial asking price asked for the e-commerce marketplace.

But, now Infibeam founder and MD Vishal Mehta in a telephonic conversation with Economic Times has denied any such conversations happening between the two companies. Putting it out in simple, straight words, He said, "No, we haven't made any offer to Snapdeal."

Last week, Snapdeal rejected Flipkart's $850 million buyout offer as Snapdeal’s board felt that the offer made by the Indian ecommerce firm undervalued their company (Read Here). However, according to some sources, Flipkart isn't ready to take no for an answer yet and has decided to give its rival company a new improved offer, which is likely to be close to USD 1 billion (Read Here).

Industry experts keeping a watch on the latest development shared that since Infibeam focuses on business-to-business commerce and Snapdeal is a full-blown consumer-led online retail platform, their coming together would have been a match made in heaven. In add to this, Infibeam being interested in Snapdeal doesn't mark the end of the road for Flipkart. Both the players can cross-sell their products as their merchants are largely different.

Though Infibeam MD might have denied about any such talks taking place, we know there is no smoke without fire. According to the ET report, sources have informed that an offer from Ahmedabad-based company has the potential of giving liquidity to all the stockholders of Snapdeal, a list that includes glowing names such as Chinese ecommerce major Alibaba Group, and venture capital firms Kalaari Capital and Nexus Venture Partners.

According to ET sources, Infibeam will be making a formal decision on the matter only when both Flipkart and Infibeam furnish an official offer letter on the table.

The Flipkart-Snapdeal merged entity is expected to give a major push to the current cut throat competition going on between Jeff Bezos' Amazon and India's very own homegrown e-commerce leader, Flipkart. Reportedly, Bezos' has recently decided to spend a whopping amount of $5 billion in India to gain significant share as the e-commerce market surges in the Indian subcontinent.

According to Masayoshi Son, SoftBank founder, the deal if goes through can prove to be a win-win situation for both homegrown e-commerce players. Sources inform that the Son, whose company owns about a third of Snapdeal parent Jasper Infotech Pvt. Ltd. could contribute that equity to the merged entity and infuse another $500 million to $1 billion in Flipkart through a transaction with Flipkart backer Tiger Global Management. The amount will give Flipkart more fuel to battle it out with Amazon.

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