Private sector lender Axis Bank has agreed to buy mobile payments company Freecharge from Snapdeal for Rs 385 crore, according to filings with the Bombay Stock Exchange.
As per the earlier discussions, Axis Bank came out to be the top bidder which we reported.
“The two boards signed the sale process agreement today,” said Rajiv Anand, executive director, Axis Bank.”The idea behind acquiring FreeCharge was to get access to its 5 crore customer base, leverage its strong brand, use its technology platform and also integrate its high quality team.”
The nearly $60 million deal is a significant drop from the $400 million that Snapdeal had acquired Freecharge for in 2015.
The bank has entered into a share purchase agreement with Jasper Infotech Pvt Ltd to acquire 100% equity capital of Accelyst Solutions Pvt Ltd and Freecharge Payment Technologies Pvt Ltd.
FreeCharge’s 200-member team will be retained by the bank, which aims to run the digital payment platform as a separate entity. “We want to keep FreeCharge as a separate entity, depending on regulatory approval,” Anand said.
This acquisition has the potential to make a large impact on the digital payments and banking space says Kunal Bahl,CEO of Snapdeal. This deal is also referred to as a “WIN-WIN” that will allow Snapdeal to focus further on their ecommrce business and on the other hand, Axis Bank will get most innovative technology capabilities in financial service space.