E-commerce marketplace eBay India has received permission from the Department of Commerce to sell its unit in an SEZ in Bengaluru to ES Online Services India as a part of the process of merging with Flipkart.
In April, eBay, the American parent company of eBay India, had invested about $500 million in home-grown marketplace Flipkart. As a part of the merger, which is likely to be closed on July 31, all the assets and liabilities of eBay India will be transferred to Bengaluru-based Flipkart. To ensure a smooth transition, eBay had created an entity called ES Online.
As per a document from the Commerce Department, the approval on the transfer of the asset (a software development centre) was given under the Business Transfer Agreement of the SEZ (Special Economic Zone) Rules. The asset sale, in this case, required an approval since the unit was a part of the SEZ.
An eBay spokesperson told BusinessLine: “eBay India’s proposal to sell its unit at the SEZ in Bengaluru to ES Online Services India (an eBay group entity) was approved by the Board of Approval (BOA) for Special Economic Zones at its 78th meeting held on July 3. The BOA noted that the transfer of assets and liabilities of eBay India’s SEZ unit at Bengaluru is based on a Business Transfer Agreement wherein the software development business of eBay India would be transferred to ES Online on a going concern basis.”