Vulcan Express may be part of Flipkart-Snapdeal merger deal
Photo Credit: Shah Junaid/VCCircle

Vulcan Express, the in-house logistics arm of beleaguered e-commerce firm Snapdeal, will likely form part of the negotiations of the ongoing merger talks between Flipkart and Snapdeal, according to a media report.

BloombergQuint, citing two unnamed sources aware of the development, reported that the final terms of the deal will decide whether Vulcan will be merged with Ekart, the logistics arm of Ekart or continue to operate as a separate entity.

“Flipkart outsources despite having its own logistics arm, and it won’t hurt the online retailer to extend its services via Vulcan,” one of the persons mentioned above was quoted as telling BloombergQuint.

E-mail queries sent to both Flipkart and Snapdeal in this regard did not elicit a response at the time of filing this report.

Vulcan Express handles more than 55% of Snapdeal’s deliveries while the rest are outsourced, the report added. Vulcan Express, which is currently operational in more than 100 cities, offers end-to-end logistics and supply chain solutions for retail companies. It also offers a range of services that includes pickup, consolidation and fulfilment operations, warehousing solutions, intercity movement and last mile delivery services.

According to recent reports by Business Standard, the deal talks are getting protracted as the parties concerned are deliberating over the fate of Snapdeal’s associated entities. Also, brand Snapdeal will likely cease to exist within a year of the merger.

The other entities associated with Snapdeal include payment wallet FreeCharge and Unicommerce, the e-commerce management entity that Snapdeal acquired in 2015.

Multiple parties including Paytm, Times Internet, PayPal, MobiKwik and a new age bank have shown interest in acquiring FreeCharge, according to BloombergQuint. However, according to an Economic Times report last month, Paytm signed a non-exclusive term sheet to explore an acquisition and due diligence talks are already believed to be on.

Flipkart and Snapdeal, operated by Jasper Infotech Pvt Ltd, are currently engaged in what is the biggest merger till date in the Indian e-commerce space. The Masayoshi Son-owned Softbank, which is engineering this shake up, is Snapdeal’s largest stakeholder even as it is expected to pump funds into the merged entity as part of the deal. Flipkart had recently raised $1.4 billion from Tencent, Microsoft and eBay. Last month, Flipkart signed the term sheet for the merger and kick-started the due diligence process. Media reports stated that the deal could be struck by the end of this month.

While the two companies are yet to officially confirm these developments, Snapdeal has seen an exodus of top-level executives. The most recent one was Snapdeal’s former vice-president and head of category management, Saurabh Bansal who quit the firm and joined eyewear retailer Lenskart as senior vice president and head, buying and merchandising.

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