Snapdeal in the Race to Acquire Jabong

BENGALURU: Online fashion retailer Jabong could be acquired either by Snapdeal or by Kishore Biyani’s Future Group . However, the final price at which it the deal is expected to go through is much lesser than what its asking price was. While Snapdeal seems to be more interested in a cash-cum-stock transaction, Future Group has offered an all-cash deal. Global Fashion Group, the owners of Jabong, estimated the value of the company at around $200 million, but sources close to Snapdeal and Future Group said their offers were at a fraction of this amount and could be as less as $50 million. Both these offers have been formally made to the GFG board.

Earlier, Aditya Birla Group’s  Abof and Flipkart had also shown interest in Jabong but subsequently withdrew from the race. Jabong was launched under the banner of German incubator Rocket Internet in 2012. Swedish investment firm Kinnevik also owns a large stake in Global Fashion Group.

Both are said to be eager to exit. Jabong could fit into Biyani's play as the country's largest listed retail group is bullish on fashion business and Future hasn't built scalable ecommerce ventures on its own. Snapdeal has been battling it out with deep-pocketed rivals such as Flipkart and Amazon in the fashion segment, considered to earn substantially higher margins compared to electronics or general merchandise.

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