Paytm and Snapdeal merger driven by Alibaba could be on the cards


Paytm and Snapdeal have reportedly had talks for a merger in an all-stock transaction. While there hasn’t been any official word around it, certain individuals related to the matter have said that the deal might not happen but there is a possibility that the talks could resume again.
But by Paytm, it’s assumed that only the online market place of Paytm is being considered, not the digital wallet product.
Now of course this information is not completely verified, but if the companies do come down to an agreement, Alibaba will be the largest shareholder of the new entity. Alibaba, the world’s largest e-commerce company already has a 40 percent stake in Paytm and about 3 percent in Snapdeal.
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Paytm’s online marketplace business now sits under ‘Paytm E-commerce Private Limited’ which gets funding from Alibaba and SAIF Partners. Softbank will also play a major role since it is a major investor in Snapdeal as well as a stake in Alibaba.
“Snapdeal and Paytm have held talks to merge and this deal is driven by Alibaba,” said one person familiar with the matter. The managements of Snapdeal and Paytm are waiting to see how the two companies fare in the first two months of 2017, said a person related to the matter.
We recently heard that Snapdeal is expecting to turn profitable in the next two years as the company is planning to cut costs and boost efficiency. There was also news that the company is laying off 30 percent of its workforce which includes about 5,000 contract and 3,000 on-roll employees from Snapdeal’s logistics subsidiary Vulcan Express.


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