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Snapdeal, Future Group are final contenders to acquire Jabong

By Meenakshi Kumar

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After all the uncertainties, it has emerged that Snapdeal and Kishore Biyani’s Future Group have emerged as final contenders to acquire Jabong. The valuation is less than the original asking price. Online fashion retailer Jabong, owned by Global Fashion Group (GFG), has been in talks with online retailers Snapdeal, Flipkart and Aditya Birla Group’s fashion portal, abof.com for sale.

It is believed that Snapdeal is interested in cash-cum-stock transaction while the Future Group has offered an all-cash deal. GFG had valued the company at 200 million dollar but it seems that Snapdeal’s and Future Group’s offers were at a fraction of this amount and could be as less as 50 million dollar. Both these offers have been formally made to the GFG board.

Earlier, Flipkart and Aditya Birla group’s Abof had shown interest in Jabong but later withdrew from the race. Jabong’s owners owners AB Kinnevik and Rocket Internet are unwilling g to pump in any more capital given the gloomy state of economic affairs. Kinnevik is the largest shareholder of GFG and is negotiating with buyers on behalf of Rocket Internet which owns more than 21 per cent of GFG. Rocket Internet recently sold FabFurnish to the Future Group in a distress sale. Jabong was founded under the banner of German incubator Rocket Internet in 2012.

Jabong’s revenues dropped 7 per cent to Rs 869.1 crore in 2015 from the year earlier but its losses were trimmed to Rs 46.7 crore from Rs 159.5 crore after a clampdown on discounts. However, its GMV rose 14 per cent to Rs 1,503 crore from almost 5.4 million orders. Jabong’s net sales grew 14 per cent to 32.6 million in the March quarter with a gross profit of 0.2 million.

Snapdeal