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Old 22-05-14   #1
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Icon7 Flipkart Finally Acquires Myntra in India’s Biggest E-commerce Deal


Flipkart and Myntra merger is a done deal. India’s big daddy Flipkart has acquired 100% stake in fashion and lifestyle e-retailer Myntra. The exact amount of the deal is not disclosed by either of the companies, but as per few reports it might be more than $300 million (Rs. 2000 crore approx.).
It is a 100 per cent acquisition and going forward, we have big plans in this segment. Flipkart and Myntra are getting together to create one of the largest e-commerce stories and together we will dominate the market,
said Flipkart co-founder and CEO Sachin Bansal.
Even after the acquisition, both companies will continue to run as separate and independent entities with no change in structure, employees and functioning. Sachin said that Flipkart will invest US$100 million (around Rs 600 crore) in its fashion business in the near-term. Mukesh Bansal from Myntra is going to join the Flipkart board as a part of deal and head the fashion division at Flipkart.com.
The Indian e-commerce market is estimated to be worth about $3 billion (Rs. 18,000 crore). Flipkart’s annualised sales crossed $1 billion (over Rs 6,100 crore) a year ahead of target. The move comes from Flipkart as it faces tough competition from rivals like eBay, Snapdeal and especially Amazon. Started as a book e-tailer in 2007, Flipkart gradually snowballed into a full-fledged e-commerce behemoth by expanding to categories like electronics, home decor, fashion apparel and lifestyle.
The transaction is said to have been initiated by common investors, Tiger Global Management and Accel Partners, which are understood to own majority shares in both the companies.


Source:Reuters
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Old 23-05-14   #2
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Re: Flipkart Finally Acquires Myntra in India’s Biggest E-commerce Deal

If you can't beat them, Acquire them..
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Old 23-05-14   #3
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Re: Flipkart Finally Acquires Myntra in India’s Biggest E-commerce Deal

So if flipkart and myntra are one, will the myntra website shut down?

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Re: Flipkart Finally Acquires Myntra in India’s Biggest E-commerce Deal

Originally Posted by suarezian View Post
So if flipkart and myntra are one, will the myntra website shut down?
Originally Posted by The Knight View Post
Even after the acquisition, both companies will continue to run as separate and independent entities with no change in structure, employees and functioning.
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Old 23-05-14   #5
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Re: Flipkart Finally Acquires Myntra in India’s Biggest E-commerce Deal

Originally Posted by suarezian View Post
So if flipkart and myntra are one, will the myntra website shut down?
In a way..... now, If Flipkart shuts down, then Myntra will probably shut down as well.

This acquisition makes little logical sense and there seems to be no added benefit except in terms of stock valuation. Both companies are making huge losses and I dont know how long investors are going to sustain them. Flipkarts valuations is already absurdly high, being valued at about 1.6 times the value of annualized monthly sales. The companies seem to have benefited because of the money printing policies of central banks. That will probably change over time.

I haven't gone into the details of flipkarts business but currently it seems like a bubble to me. I'm not sure if they can make a profitable business or if they will be in business after five years.
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Old 27-05-14   #6
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Re: Flipkart Finally Acquires Myntra in India’s Biggest E-commerce Deal

Originally Posted by vijayninel View Post
This acquisition makes little logical sense and there seems to be no added benefit except in terms of stock valuation. Both companies are making huge losses and I dont know how long investors are going to sustain them. Flipkarts valuations is already absurdly high, being valued at about 1.6 times the value of annualized monthly sales. The companies seem to have benefited because of the money printing policies of central banks. That will probably change over time.

I haven't gone into the details of flipkarts business but currently it seems like a bubble to me. I'm not sure if they can make a profitable business or if they will be in business after five years.
Interesting. Can you please elaborate more? Would love to know why you think so. Or any articles explaining the rationale/economics behind your statement? Just asking out of interest.
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Old 27-05-14   #7
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Re: Flipkart Finally Acquires Myntra in India’s Biggest E-commerce Deal

Originally Posted by nvarun View Post
Interesting. Can you please elaborate more? Would love to know why you think so. Or any articles explaining the rationale/economics behind your statement? Just asking out of interest.
Well actually this is all very well known and very common, most of the big .com's and similar fashionable companies (like in the biotech sector) are making huge losses. Last year flipkart made a loss of Rs.281.7 crore Flipkart India reports loss of `281.7 crore - Livemint

However according to todays investors, profits and losses dont matter - what matters are stock valuations. If the stock prices keep going up, how the company is doing doesnt matter. The greater fool theory always works. So investors keep pouring in money subsidising the losses the company makes. Who knows about pets.com anyway.

Here's an interesting article on Mint. Flipkarts Myntra acquisition: on a wing and a prayer - Livemint
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Old 27-05-14   #8
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Re: Flipkart Finally Acquires Myntra in India’s Biggest E-commerce Deal

Thanks. Makes sense.
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