Art of the steal: how Flipkart beat Snapdeal by wrapping up Jabong deal in just 3 days

Flipkart cofounders Sachin Bansal and Binny Bansal. Photo credit: LetsIntern.

This week’s Flipkart deal to acquire Jabong was completed in three days flat, explains a lawyer involved in the proceedings.

It’s a huge feat considering the US$70 million paid in cash and the humongous task of doing the due diligence on a company already mired in controversy.

The minute Vinay Joy, associate partner at law firm Khaitan & Co, and three of his colleagues received the brief from Flipkart, it was non-stop work for 72 hours.

The race was on because Jabong was in the late stages of talks with Flipkart arch-rival Snapdeal.

Art of the steal

The swift work saw Flipkart steal the deal out of the hands of Snapdeal, which desperately wanted to gain market share in the fashion ecommerce segment.

Generally a deal of this quantum takes three months to six months from due diligence to closure. “Wrapping it up in 72 hours was our challenge,” says Vinay. “As soon as we received the instructions from Flipkart, we assembled a team of four and simultaneously started working on the negotiations as well as the due diligence.”

Photo credit: kotaku.com

Khaitan & Co had earlier completed the US$200 million Freecharge acquisition by Snapdeal within a month. The team also worked with Uber when it was banned by India following a sexual assault on a passenger.

“We had experience on how to move fast on a deal without compromising any compliance,” says Vinay.

Jabong jitters

In the case of Flipkart and Jabong, Vinay and his team understood the risks and proceeded with documentation on all levels. Wherever it was not possible to have the documents immediately, it proceeded with its experience.

It’s possible that the Jabong team already was in the process to provide the due diligence documents to other parties interested in buying it.

Other legal eagles, however, say that it’s difficult to go from a cold call to closed deal in just three days – especially due to recent controversies inside Jabong.

Snapdeal boss is like ¯\ (ツ)/¯