Zomato board likely to confirm Blinkit acquisition on Friday

Zomato board likely to confirm Blinkit acquisition on Friday
The Zomato board of directors will meet on June 24 and will likely approve the acquisition of Blinkit, a quick commerce startup, according to a filing with the National Stock Exchange. The filing, however, did not name Blinkit.
"Pursuant to Regulation 29 of Listing Regulations, as amended, this is to inform you that a meeting of the board of directors of Zomato Limited ("the Company") is scheduled to be held on Friday, June 24, 2022, to discuss a potential acquisition transaction by the Company, the consideration for which may be discharged through issuance of equity shares of the Company by way of a preferential issue," the food delivery giant said in the filing.
Zomato will pay in its shares for Blinkit, formerly Grofers, as per a report.
The plan calls for Blinkit's stockholders to receive a little less than a 10% ownership in Zomato. SoftBank Vision Fund, Blinkit's largest investor, will receive a nearly 4% ownership in the foodtech startup. According to persons acquainted with the situation who spoke to ET, Blinkit investors may be required to hold Zomato shares for a minimum of six months.
Last year, Zomato invested $100 million in the Gurugram-based quick commerce startup, acquiring a 10% share.
Based on Zomato's market capitalization at the time, as per a report that the deal was expected to value Blinkit at around $700-800 million. That was less than the previous valuation of Blinkit, which was just over $1 billion.
According to an earlier report, Zomato will likely exchange one share for every ten Blinkit shares. Since Zomato initially invested in Blinkit last year, the possibility of a merger has been discussed.
Zomato announced earlier this year that it has given Blinkit a loan of up to $150 million. Zomato founder Deepinder Goyal claimed that a portion of this money had been delivered to Blinkit during its first investor call since going public last month, and that the rest amount will be released depending on whether it needed it or not.