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Indian e-commerce company Flipkart has raised its bid to acquire rival group Snapdeal according to two people familiar with the matter.

The latest offer now stands between $900 million to $950 million (₹64.1 billion), a proposal which could possibly put an end to the Bangalore-based firm’s pursuit within a few weeks. The new proposal is currently being evaluated by Snapdeal’s board.

The merger is intended for establishing a stronger domestic competitor to Amazon.com Inc which is becoming more popular in India as it invests what it says will be $5 billion in the market.

Earlier this month, Flipkart made a second bid for the online marketplace ranging from $800 million to $850 million (₹ 54.6 billion) which was rejected as the New Delhi-based company’s board was unsatisfied with the offer and payment terms.

The recent takeover proposal was made for Snapdeal’s marketplace and its e-commerce solutions provider Unicommerce, it does not include other subsidiaries such as logistics firm Vulcan Express and digital payments website FreeCharge but are being negotiated for separate deals.

Paytm another Indian e-commerce company and a few others are in talks to buy FreeCharge.

Moreover, based on the terms and conditions of the deal, Flipkart may set aside $150 million for 12 to 24 months after completion of an agreement.

Flipkart and Snapdeal have been talking about the deal since at least April as they discuss proper terms of the merger but one main cause of delay for the agreement to be accepted was the risk that Snapdeal’s value will be reduced to approximately 85 percent from its peak of $7 billion.

Softbank Group and Snapdeal’s other backers have already arranged to write off the valuation to about $1 billion.

Snapdeal’s board is expected to make a final decision in the coming days, once the deal is approved and signed, final closing could be a few months away.

If completed, this merger deal would be the biggest acquisition in the Indian e-commerce sector.

Softbank’s $500M Investment

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While the offer is still in talks with Snapdeal’s board, Softbank, the advocator of the merger may also be planning to invest $500 million in Flipkart so as to get hold of a large share of the business.

Sources said that the investment plan will be part of the Snapdeal-Flipkart deal where some of the current Snapdeal investors are looking for an exit.

The Japanese telecom company originally planned to invest $2 billion in Flipkart but at this moment, the whole amount is not coming as a primary investment and the e-commerce player will instead get $500 million out of the entire money as primary funds.   

The remaining $1.5 billion will be given to Flipkart’s major investor Tiger Global Management and Snapdeal’s investors. Tiger Global will also have two seats in the merged unit.

If the latest merger is completed, Softbank will be having two seats in the joint venture as well as major control over the $30 billion e-commerce market. It already invested $1.4 billion in Paytm which is backed by Chinese e-commerce giant Alibaba.

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