WeWork’s India Exit Deal Falls Through Amid Sector Revival

US-based coworking major WeWork Inc’s plan to sell the entire 27% stake in its Indian unit and exit the country has reportedly collapsed, months after the Competition Commission of India (CCI) approved the proposal.

“The transaction didn’t go through due to a valuation mismatch even after the regulatory nod came in from the Indian antitrust body,” as per ET, citing three people close to the matter.

WeWork Inc currently holds 27% ownership in its Indian unit. Meanwhile, the remaining 73% is owned by Bengaluru-based real estate company Embassy Group. It is pertinent to note that OAW holds the shares on behalf of WeWork International.

The Embassy Group was set to acquire the stake owned by WeWork US in the India business, which would result in bringing in investors on the back of its plan to go public.

Meanwhile, peer coworking space provider Awfis made a strong market debut on May 30, with its shares listing at a substantial premium of 12.8% on the BSE.

Additionally, marking its first step towards its initial public offering (IPO), market rival Smartworks turned into a public company and changed its name to Smartworks Coworking Spaces Ltd, as per its regulatory filing with the Registrar of Companies (RoC).

Founded in 2010 by Adam Neumann and Miguel McKelvey, the New York-based WeWork Inc leases out coworking spaces across the globe for corporate houses and independent enterprises. The company managed to scale a peak valuation of $47 Bn. 

However, the startup was weaved into legal and corporate governance issues, resulting in its filing for bankruptcy in November 2023. 

WeWork’s valuation also plunged to $750 Mn in April. 

WeWork Inc was initially looking to sell its remaining stake in its Indian unit in April, via an INR 1,200 Cr secondary transaction. As per reports, Enam group’s family office, investment fund A91 Partners and CaratLane founder Mithun Sacheti were set to buy the stake from the coworking startup then.

This development also comes right after WeWork India roped in Janak Malkani as the head of managed office for the country and sales lead for the West region, following the CCI’s approval to sell the company’s stake. 

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