snapdeal

The market has been rife with rumors of a Snapdeal takeover by Flipkart. Different sources have been suggesting that India’s number one online retailer has been eying a Snapdeal acquisition as a way to maintain and increase its lead on Amazon’s India concern — which has made rapid inroads into the e-retail sector in the country. On Sunday, Snapdeal founders attempted to assuage employee concerns regarding the rumors floating about the company, through an e-mail.

In their mail,  Snapdeal founders Kunal Bahl and Rohit Bansal attempted to convey their concerns for the well-being of the company employees. While the e-mail did not directly broach upon the topic of a possible takeover, it hinted as some tectonic changes to come in the near future.

As per Reuters, the e-mail said:

There has been a lot of media reporting and speculation around Snapdeal recently. While our investors are driving the discussions around the way forward, I am reaching out to let you know that the well-being of the entire team is mine and Rohit’s top and only priority. We will do all that we can, and more, in working with our investors to ensure that there is no disruption in employment and that there are positive professional as well as financial outcomes for the team as the way forward becomes clear.

The company has been privy to a lot of layoffs over the past year. An acquisition could lead to further layoffs depending upon whether or not Flipkart decides to merge one or more processes, that are operational in both the firms. The duo also said that the salary increments the company would be announcing this year, would be more than those announced last year.

An acquisition will also have implications for the supposed initial public offering the company had been considering for over two years. And if an IPO does not happen, employees who had been offered and had taken stock options as compensation, suddenly find themselves facing fears that their shares would lose value and might even become more or less worthless, if an acquisition does occur. Although Snapdeal was valued at around $6.5 Billion in its fundraise last year, however it would be likely to go for significantly less should a sale actually occur.

Reuters also reported sources stating that a deal with Flipkart was being structured even as we speak and it was likely to be announced within a month. Such an acquisition would be extremely interesting in all aspects. What kind of roles would the founders be delegated now that Flipkart’s own founders have moved on to less operational positions? Would Snapdeal operate as an entity in its own right and so on. We will have to wait for an official announcement to conjure up some answers.

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