The biggest news of 2014, in Indian economy, has been the acquisition of Myntra by ecommerce biggie Flipkart. There is 100% acquisition, and now the two identities are merged to give to the world the best of fashion service. It is reported that the acquisition value was approximately INR 2000 crore. The move may pose a risk to top offline fashion retailers like Aditya Birla Group, Reliance Group and the Future Retail Group, and even to online retailer Snapdeal. Myntra’s co-founder Mukesh Bansal says, “We will retain the same management team at Myntra. Neither employees roles nor the company’s road map will change. The idea is to…preserve a unique culture”.
The same year also saw other acquisitions in various sectors. Gaana.com reportedly, acquired Musicfellas, for INR 50 lacs. There have been talks of Jabong (India) being in the process of merging with four other firms, to build a greater e-commerce entity. But no deal has been confirmed yet. As economists try to analyze the reason of the latest mergers, the reasons seems plenty. One of the most important causes is to limit competition and in the process, maximize the value of the company and expand globally. Often startup fund raise, diversification and management disputes are the reason for M&A.
Joint venture business opportunities have also been in the news. One of the significant deals that made noise in 2014 has been the tie up between global top shot Amazon and billion dollar company Infosys. The deal was confirmed in May and involves partnership between Amazon and Catamaran Ventures, the private investment firm of Infosys CEO Narayana Murthy, to come up with Taurus Business and Trade Services, to assist SMBs in digitization and setting up of their very own e-stores. We assume this is an extremely tactical move, in this current period, when e-commerce is at its peak in India.