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Zomato is looking to buy off Blinkit in a share-swap deal

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Multiple persons briefed on the situation indicated that online food-delivery provider Zomato is in talks to buy Blinkit, formerly Grofers, in a share-swap deal. This follows Zomato’s $100 million investment in the Gurgaon-based quick-commerce business last year, which gave it 10% ownership.

Since Zomato’s investment in Blinkit, the merger has been predicted as a likely consequence. In reality, ET reported in 2020 that the two corporations were considering combining forces. While the details of the acquisition are still being worked out, Zomato shareholders are expected to receive 10 Blinkit shares for each Zomato share they own, according to the sources.

Based on Zomato’s current market capitalization, Blinkit would be worth roughly $700-800 million. This is less than the previous valuation of Blinkit, which was a little over $1 billion. Albinder Dhindsa, the founder of Zomato and Blinkit, did not respond to ET’s inquiries.

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Meanwhile, Zomato said in an exchange filing on Tuesday that it will give Grofers India Pvt Ltd, Blinkit’s Indian subsidiary, a loan of up to $150 million. With a term of no more than a year, interest will be charged at a rate of 12% per year.

Zomato

SoftBank Vision Fund, Blinkit’s largest investor, would receive a stake in the meal delivery company as part of the planned share swap. Tiger Global, which already owns a stake in Zomato, plans to grow its holdings.

Last year, SoftBank made a $450 million investment in Swiggy, Zomato’s main competitor. According to the people, the Japanese company is anticipated to acquire a 4-5 per cent interest in Zomato as part of the agreement.

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The investment, according to Zomato, is in line with the company’s stated intention of spending up to $400 million in India’s quick-commerce industry. The food technology business also announced that it would buy a 16.66 per cent share in Mukunda Foods, a food robotics company.

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Nivedita Bangari
Nivedita Bangari
I am a software engineer by profession and technology is my love, learning and playing with new technologies is my passion.

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