CarTrade said it has entered into a share purchase agreement with Sobek Auto India Private Limited and its holding company OLX India B.V. for acquisition of 100% stake in Sobek
Last month, Sobek acquired the classified internet business from OLX India Private Ltd under a business transfer agreement
CarTrade said the acquisition will provide synergistic benefits to its existing business
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In a respite for global investment group Prosus, publicly listed used car marketplace CarTrade on Monday (July 10) said it would acquire OLX Auto’s India business for INR 537.4 Cr.
In an exchange filing, CarTrade said it has entered into a share purchase agreement with Sobek Auto India Private Limited and its holding company OLX India B.V. for acquisition of 100% stake in Sobek from OLX India B.V.
Last month, Sobek acquired the classifieds internet business from OLX India Private Ltd under a business transfer agreement, as per the filing.
As part of the acquisition, Sobek entered into an intellectual property license agreement and a transitional support agreement for the use of certain brands and technology.
CarTrade said the acquisition will provide synergistic benefits to its existing business. The acquisition is expected to be completed in 21-30 days.
Prosus, which owns 99% stake in OLX Group, was in talks with multiple parties to sell its India classified business. Earlier this year, it was reported that Prosus held talks with Spinny and Cars24 for selling OLX India’s auto business.
In its recent earnings report, Prosus chief executive Bob van Dijk said that while OLX Autos had built leading positions across many of its key markets given its strong technology platforms and local focus, pursuing a global growth strategy was no longer the right approach for the company’s shareholders.
He said the company was exploring all options for the auto business. “The exit of OLX Autos will significantly improve the profitability profile of our classifieds segment as a whole and supports our stated first half of FY25 ambition of a profitable ecommerce segment,” he added.
In FY23 OLX Autos’ trading loss stood at $418 Mn, while its ecommerce business’ trading loss was at $401 Mn. This year, OLX Group laid off 1,500 or 15% of its total workforce due to macroeconomic conditions.
CarTrade competes against the likes of Cars24, Spinny, CarDekho, and Droom in the crowded used car marketplace in India. In FY23, CarTrade reported a net profit of INR 40.43 Cr as against a loss of INR 121.35 Cr in FY22.
Shares of CarTrade ended 1.73% lower at INR 495.4 on the BSE on Monday.
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