The India counsel for eBay Singapore in its investment in Flipkart Limited in Singapore, and sale of eBay India to the company, said the deal required extensive due diligence and co-ordination across various jurisdictions.
“This was because while the transfer of the shares of eBay India was conducted in India, the primary investment was to be made in Singapore,” Vivek K Chandy, partner at J Sagar Associates (JSA) told Asia Business Law Journal.
The deal is one of the largest in India’s e-commerce sector to date. It involved the primary investment of approximately US$500 million by eBay into Flipkart Limited, which is the ultimate holding company of the entire Flipkart group.
The sale of eBay India to Flipkart Limited involved about US$225 million (subject to adjustments) for which eBay India’s shareholder received shares of Flipkart Limited for that value. Investments from Tencent and Microsoft took the total deal value to approximately US$1.4 billion.
Extensive due diligence was required in this complex transaction as eBay Singapore was the investor as well as the seller.
“The deal was very interesting right from the due diligence stage until the post-closing activities,” said Chandy. “There was much to learn and work through as the teams structured the deal, worked on obtaining competition law and other approvals, and finally proceeded to close.
“Ultimately, the parties had to work through the arrangements pre- and post-close, which would allow their businesses to operate as seamlessly as possible. Hence, a great deal of attention was paid to operational matters, including transition matters.”
The deal was closed upon receipt of approval from the Competition Commission of India on 31 July 2017 and the fulfilment of other conditions. Chandy and JSA partner Archana Tewary worked on the deal, with principal associate Siddharth K Vedula advising on due diligence, deal structuring, negotiations, documentation and overall management of the deal, while senior associate Ritika Vaswani assisted in documentation related to the transfer of immovable properties in several locations.
Other JSA team members included senior associate Pooranimaa Hariharan and associates Medha Shah, Astha Shrivastava and Anand Balaji. Partners Amitabh Kumar and Vaibhav Choukse, and associate Diksha Rai, advised on anti-trust law compliances, while partner Kumarmangalam Vijay advised on certain tax-related aspects of the deal documentation.
Morgan Lewis & Bockius acted as US counsel to eBay, while Morgan Lewis & Bockius acted as Singapore counsel to eBay. For Flipkart, Gunderson Dettmer acted as US counsel, Allen Gledhill acted as Singapore counsel and Cyril Amarchand Mangaldas acted as India counsel.