Leading Indian express parcels operator Delhivery is buying struggling rival Ecom Express for a bargain price to expand its customer base and operational network and partly consolidate one of the world’s fastest-growing e-commerce delivery markets.
Delhivery announced on April 5 that it had signed a definitive agreement to acquire a controlling stake in Ecom Express Limited for a cash consideration of Rs. ~1,400 Cr. (US$162m) from its shareholders.
Ups and downs
The takeover, described as a ‘distress deal’ by Indian media, comes after fluctuating fortunes for the two companies in recent years.
Delhivery sealed a strategic partnership with FedEx in 2021, including a $100m injection, successfully floated on the stock exchange in 2022 and improved its profitability significantly. The company delivered 740 million parcels in the 2023/24 financial year and has broadened its business model into freight transport and logistics services.
In contrast, Ecom Express grew rapidly in its first decade after being founded in 2012 but has struggled more recently. In 2022, Amazon apparently considered taking over the company but nothing ever came of the rumours. The loss-making firm was forced to drop plans for an IPO last year as its valuation plummeted and, according to Indian media, started to lay off workers and close some of its facilities over the last few months.
Bold investments
