Flipkart and Amazon may have discussed a possible buyout and there is no smoke without fire

Amazon might have initiated talks with Flipkart for a possible buyout. Although Flipkart’s Binny Bansal has rejected such rumours but there is no smoke without a fire.

As per a report in Economic Times, discussions were held between Flipkart and Amazon on a possible buyout, which eventually fell flat over disagreement over the offer.

ET quoted its sources saying there is no reason to believe that a deal will be struck or that talks are still ongoing between the two.

However, Binny Bansal rubbished all rumours and said Flipkart would raise money only at the right valuation.

"All rumours of potential sale and down rounds are false and baseless. Flipkart continues to be the market leader in India and we are in this business for the long haul," said Bansal, who took over as CEO in January, succeeding cofounder Sachin Bansal, who is now the executive chairman of India's most valuable startup.

Even if Flipkart was in talks for a buyout, it would have happened for two reasons-first it radically alters the narrative about online retail industry in India and second questions are on ability of Indian startups to fight and win prolonged battles for market domination.

It is worth mentioning that Flipkart opened negotiations with Alibaba for a fresh round of funding.

While Flipkart is market leader, Amazon has access to cash from its balance sheet, and founder Jeff Bezos has promised to invest $2 billion in India. Alibaba is an investor in both Paytm and Snapdeal, making India a battleground for two of the world's largest online retailers.
Well, situations can differ if Alibaba shows keen interest in Flipkart.

"If Alibaba takes a stake in Flipkart, and decides to merge all three companies (Flipkart, Paytm and Snapdeal) that may put Amazon in a tough spot," said a top venture capitalist, indicating that a formal offer by Alibaba may bring Amazon back to the negotiating table.

It is yet to see whether Flipkart will end its conventional thinking of being an independent Internet giant.

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