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Source: Nanfang Daily Online Edition     time: 2022-08-18 12:37:00

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  Zomato to acquire Blinkit in Rs 4,447-crore deal

Zomato on Friday said it will acquire Blink Commerce Pvt
Image Source : PTI | FILE PHOTO

Zomato on Friday said it will acquire Blink Commerce Pvt Ltd (formerly known as Grofers India Pvt Ltd).

Highlights

  • The company's board at a meeting held on Friday has approved acquisition
  • The company already holds 1 equity share and 3,248 preference shares presently in BCPL
  • This transaction will be carried out through issuance and allotment of up to 62.85 crore

Zomato buys Blinkit: Online food delivery platform Zomato Ltd on Friday said it will acquire Blink Commerce Pvt Ltd (formerly known as Grofers) for Rs 4,447.48 crore in a share swap deal as part of its strategy of investing in quick commerce business.

The company's board at a meeting held on Friday has approved the acquisition of up to 33,018 equity shares of Blink Commerce Pvt Ltd from its shareholders for a total purchase consideration of Rs 4,447.48 crore at a price of Rs 13.45 lakh per equity share, Zomato said in a regulatory filing.

Blink Commerce Pvt Ltd runs the online quick commerce service under the Blinkit brand. It was formerly known as Grofers.

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 Rs 70.76 per equity share on a preferential basis, it added.

The company already holds 1 equity share and 3,248 preference shares presently in BCPL, the filing said.
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."

On how Blinkit fits into the larger picture at Zomato, Goyal said Blinkit is also a hyperlocal business, just like food delivery and it also caters to a need for quick delivery of products for Zomato customers.

"Quick commerce will help us increase the customer wallet share spent on our platform and also drive higher frequency and engagement from our customers," he added. Post the completion of the acquisition, he said Blinkit and Zomato apps would continue to exist separately.

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"Zomato brand stands for everything 'food' in customers' minds, while Blinkit is on the path to becoming a brand that customers associate with grocery and essential supplies," he said.

The Blinkit team, led by Albinder Singh Dhindsa will continue to run the business, Goyal said. 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.

In March this year, the Zomato board had approved granting a loan of up to USD 150 million to Blinkit. Last year it had invested USD 100 million (Rs 745 crore) for acquiring around 9 per cent stake in erstwhile Grofers.

Zomato had stated its intention of investing up to USD 400 million in cash in quick commerce in India over the next 2 years. 

Also Read: Zomato brings world's first 10-minute food delivery, know more

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