E-commerce giant Flipkart has appointed Goldman Sachs for the proposed acquisition of its bitter rival Snapdeal. The investment bank has already started working on the broad contours of the deal.
According to a report in ET, Goldman Sachs is working with Credit Suisse to hammer out the final terms and conditions for the transaction.
The proposed acquisition, touted to be the biggest in India's online retail space, is likely to be finalised over the coming weeks, the report said.
Credit Suisse, which will be guiding Snapdeal through the sale process will take into account the potential gains of an acquisition by Flipkart. Credit Suisse had made a presentation to the board of the Gurgaon-based online marketplace a few weeks ago.
Snapdeal has for weeks been at the center of much takeover speculation, with its largest backer Japan's Softbank, seen as keen to sell the company to its larger rival, Tiger Global-backed Flipkart.
Earlier in an e-mail, Snapdeal founders Kunal Bahl and Rohit Bansal said their priority was to ensure the well-being of employees amid the "speculation" surrounding the company.
"We will do all that we can, and more, in working with our investors to ensure 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 duo said in the letter.
The founders had also reached out to the employees promising them higher salaries compared to last year as the company heads towards a possible sell out in the coming weeks.
Snapdeal has about 3,000 employees in its e-commerce operations. The company also has mobile wallet (FreeCharge) and logistics (Vulcan) operations. Snapdeals largest investor SoftBank is believed to be re-working its plan for sale of e-commerce platform Snapdeal and a final decision is likely to be made in the next few weeks.
Softbank had engaged in dialogue with other investors with board representation -- Kalaari Capital and Nexus Venture Partners -- to reach a consensus in terms of valuation. Snapdeal's seven-member board includes representation from investors SoftBank, Kalaari Capital and Nexus Venture Partners, as well as co-founders Kunal Bahl and Rohit Bansal.
Snapdeal had earlier faced hurdles as company's early backers - Kalaari Capital and Nexus Venture Partners had not agreed with the valuation given by SoftBank.
Snapdeal was valued at USD 6.5 billion in its last funding round in February 2016. The valuation has also shrunk since then and the potential deal could be struck at a discounted rate.
The cash-strapped firm, over the last few months, has had to trim its workforce significantly and shut down non-core businesses. Earlier this year, Snapdeal laid off about 600 people.
Indian e-commerce companies have seen funding dry up over the last few months as investors are focussing extensively on profitability and rationalisation of expenses.