NEW DELHI/TOKYO: SoftBank, the Japanese telecoms and internet giant, is reported to be in advanced talks as it seeks to engineer a merger between Snapdeal and Flipkart, two of India's largest domestic e-commerce players.

According to the Financial Times, SoftBank believes a merger would counter the growing threat posed by Amazon, which aims to become India's dominant e-commerce company and has allocated $5bn investment to secure that aim.

SoftBank currently holds a 35% stake in Jasper Infotech, Snapdeal's parent company, and is reportedly negotiating with Flipkart investors about selling Snapdeal in a deal worth around $1bn.

"SoftBank is keen to merge the two companies, but some of the minority shareholders are not happy with the valuation that is being talked about," a source told the Financial Times.

According to "people familiar with the discussions", multiple parties have been involved in the talks, including US investment group Tiger Global Management, the biggest investor in Flipkart.

But it appears that Snapdeal's founders, Kunal Bahl and Rohit Bansal, are holding out for a higher valuation of the company along with some of Jasper Infotech's minority shareholders, such as Nexus Venture Partners and Kalaari Capital.

For their part, Kunal Bahl and Rohit Bansal seem to accept that the future of Snapdeal is no longer in their hands because they sent an email to all staff on Sunday that did not refute reports that its days as an independent company could be coming to an end.

Instead, Livemint reported, the two entrepreneurs told staff that "investors are driving the discussions around the way forward".

Bahl and Bansal added that the wellbeing of all staff was their top priority. "We will do all that we can, and more, in working with our investors to ensure that there is no disruption in employment and that there are positive professional as well as financial outcomes for the team as the way forward becomes clear," they wrote.

Data sourced from Financial Times, Livemint; additional content by WARC staff