Amazon.com Inc. is in initial talks to acquire more than 51% in logistics unicorn Ecom Express Ltd for $500-600 million, two people aware of the plans said, as the e-commerce giant aims to build an in-house logistics division to catch up with its rivals.
Ecom Express is already among the delivery partners of Amazon India, which, unlike its rivals, does not have its own logistics division.
“The two companies are in preliminary discussions for a potential co-promotership in Ecom Express. Going by the current metrics of Ecom Express, the deal may be worth at least $500 million, valuing Ecom Express at more than $1.2 billion,” one of the two people cited above said on the condition of anonymity.
Spokespeople for Ecom Express and Amazon declined to comment. An email to a spokesperson for Warburg Pincus remained unanswered until press time.
Amazon’s rivals Reliance Industries Ltd’s JioMart and Walmart-Flipkart have their in-house supply-chain arms. Still, about 60% of the e-commerce logistics market in India is outsourced, according to a recent report by researcher PGA Labs.
“If the proposed deal goes through, Amazon will get an in-house supply-chain firm, which will help further speed up its delivery while keeping its costs low,” the person cited above added.
The proposed deal also provides an exit to Warburg Pincus, which holds 52.2% in Ecom Express, the people cited above said.
