Flipkart and Snapdeal are negotiating the acquisition with higher offer

Flipkart's $850 million offer to buy Snapdeal was reportedly rejected by the board, after which the two e-commerce companies are holding discussions about the $150-200 million valuation gap with the initial offer.

As per sources, Flipkart had offered $1 billion for the deal but after due diligence, it altered the offer to $800-850 million, which was rejected by Snapdeal's board.

"However, the deal isn't off and negotiations will continue. The differences over Snapdeal's valuation could delay the process," said people aware of the developments.

If the deal goes through, it’d be the biggest acquisition in the Indian e-commerce space.

The reason behind the acquisition is the sluggish growth of Snapdeal as compared to rivals Amazon and Flipkart.