eBay cuts stake in Snapdeal; Foxconn unit invests $200 mn

E-commerce company eBay Inc has sold a portion of its stake in Indian online marketplace Snapdeal and will focus on boosting its own business in the country, it said on Tuesday.

Separately, FIH Mobile, a unit of Taiwan’s Foxconn, the trading name of Hon Hai Precision Industry Co, said it was acquiring a 4.27 percent stake in Snapdeal for $200 million via its Singapore-based subsidiary Wonderful Stars Pte.

Sources told Reuters this month that Snapdeal was set to raise $500 million from China’s Alibaba Group Holding, Japan’s SoftBank Group Corp and Foxconn, valuing Snapdeal at more than $5 billion.

The Snapdeal stake sold by eBay was purchased by the Foxconn unit and other investors, a person familiar with the deal told Reuters on Tuesday.

The US company said it would retain “a significant portion” of its original investment in Snapdeal. Financial details of the deal were not disclosed.

The partial stake sale will help eBay to earn a strong return on its invested capital, the company said, citing a rise in the valuation of the Indian business over the past two years.

It said the cash would be redeployed in other areas of eBay’s business, adding that it will focus on boosting its presence in India, which it considers an important market in its fast-growing Asia Pacific region.

Reuters