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Zomato approves Blinkit acquisition for ₹4,447 crore | Mint – Mint

The board of Zomato has approved the acquisition of Blinkit for 4,447 crore in an all-stock deal, the food delivery company said in a statement on Friday. 

It stated that the board has approved acquisition of up to 33,018 equity shares of Blink Commerce Pvt Ltd from its shareholders for a total purchase consideration of 4,447.48 crore at a price of 13.45 lakh per equity share.

This transaction will be carried out through issuance and allotment of up to 62.85 crore fully paid-up equity shares of Zomato, having face value of Re 1 each at a price of 70.76 per equity share.

“This acquisition is in line with our strategy of investing in the quick commerce business,” Zomato said.

The move comes as Zomato is looking to take advantage of the booming quick delivery market. Rivals Swiggy, Reliance Industries-backed Dunzo, Tata-backed BigBasket and Zepto are also betting on fast deliveries in the so-called quick commerce sector.

Zomato already owns a more than 9% stake in Blinkit.

In March this year, the company had approved a grant of loan up to $150 million to Blinkit, formerly Grofers, in one or more tranches.

Explaining the rationale behind the proposed acquisition of Blinkit, in a letter to shareholders, Zomato Founder & CEO Deepinder Goyal said, “Quick commerce has been our stated strategic priority since the last one year.

“We have seen this industry grow rapidly both in India and globally, as customers have found great value in quick delivery of groceries and other essentials. This business is also synergistic with our core food business, giving Zomato the right to win in the long-term.”

He further said, “This foray into the next big category is timely as our existing food business is steadily growing towards profitability.”

As part of the transaction, Zomato will also acquire the warehousing and ancillary services business of Hands on Trades Private Ltd (HOTPL). Zomato CFO Akshant Goyal said the transaction is expected to be closed in early August 2022 subject to shareholders’ and stock exchange approvals.

Formerly known as Grofers, SoftBank Group-backed Blinkit rebranded itself late last year as its chief promised to speed up deliveries of everything from groceries to electronics in a burgeoning market dominated by Walmart’s Flipkart and Amazon’s local unit.

Blinkit, which operates in over 20 Indian cities, delivers products ranging from milk, fruits and vegetables to electronics.

Shares of Zomato ended 1.15% higher at 70.35 apiece on the BSE on Friday. 

 

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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