It is often seen that sale of a company leaves employees high and dry but not in the case of Snapdeal. It is speculated that the company may offer 193 crore to its staff if the e-commerce firm is taken over by rival Flipkart.
According to reports, the sanpdeal will give half of their payout, which is approximately USD 30 million for the proposed scheme which would cover all its current employees. The company’s current strength is about 1,500-2,000 employees.
Some of the former senior executives of the e-commerce firm, who have left the firm in the last 12 months, may also be benefited from the process.
The deal-linked payment would not only be extended to employees who own ESOPs but also to the ones who don’t own them. This has been done in order to reward them for staying with the company till the proposed transaction with Flipkart is complete.
The process to sell Snapdeal to rival firm Flipkart has been initiated by its largest investor SoftBank. The founders and early investors have shown their consent to the deal.
As per regulatory filings, SoftBank currently owns over 30 per cent in Snapdeal, while Nexus has roughly a 10 per cent stake and Kalaari holds 8 per cent share in the firm. A non-binding term sheet to start the due diligence by Flipkart for Snapdeal is expected to be signed soon between the two parties.
In the past few months, Snapdeal has seen a number of voluntary and involuntary exits. While the company has hiked salaries by up to 15 per cent, employees are concerned about their future as the impending takeover looms ahead.
One of the leading contenders in the Indian e-commerce space, Snapdeal has seen its fortunes failing amid strong competition from US-based Amazon and Flipkart.
Compared to a valuation of about USD 6.5 billion in February 2016, the sale to Flipkart could see Snapdeal being valued at about USD 1 billion.
SoftBank had recently said it suffered a loss of USD 1 billion (Rs 6,500 crore) on its investment in Snapdeal during 2016-17, almost matching the money it put in the home-grown marketplace.
The deal between Snapdeal and Flipkart, if completed, would mark the biggest acquisition in the Indian e-commerce space and change the landscape of the sector that is witnessing intense competition among players.
With inputs from PTI.