EBay to relaunch in India after selling stake in Flipkart for $1.1 billion
US e-commerce major eBay will relaunch in India after selling its complete stake in Flipkart which is estimated to fetch eBay approximately $ 1.1 billion. The company will focus on cross border trade and feels that the Indian market is big enough for multiple players to succeed.
Ebay Inc had bagged a 5.4 percent stake in India’s largest marketplace Flipkart in return of its India business unit & $500 million (approx Rs 3256 crore) investment made into Flipkart last year.
As part of the deal eBay and Flipkart were working together to leverage opportunities in trade across borders. However, as the Walmart-Flipkart deal got sealed with Walmart Inc announcing that it is buying 77 percent stake in Flipkart for about USD 16 billion, eBay has decided to go solo again in India.
“EBay has notified Flipkart and Walmart that it intends to sell its holdings in Flipkart, which will represent gross proceeds of approximately $1.1 billion. Following the close of the transaction, we also will be ending our current strategic relationship with Flipkart, which includes unwinding our commercial agreements with Flipkart and terminating Flipkart's license to use the eBay.in brand”, the eBay statement said.
“We plan to relaunch eBay India with a differentiated offer to focus initially on the cross-border trade opportunity, which we believe is significant. We believe there is huge growth potential for e-commerce in India and significant opportunity for multiple players to succeed in India’s diverse, domestic market,” the statement added.
The Ebay-Flipkart deal was sealed in August last year after Flipkart had raised 1.4 billion dollars from Tencent, Microsoft, and eBay last April. Ebay exchanged its India Company and invested $ 500 million dollars for an equity stake in Flipkart thereby making Ebay.in a Flipkart group company.
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