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UNITE AND CONQUER: THE SOFTBANK STRATEGY


Three Recent Happenings which involve Softbank:


1)Flipkart and Snapdeal hold merger talks both have Softbank as their investor, although talks failed.


2)Uber sells its China business to Didi both have Softbank as an investor


3)Uber sells its Singapore business to Grab both have Softbank as an investor.


The strategy of Softbank looks pretty clear from these, it buys stake in competitor firms in the same sector and then merges them forming a single entity which gets substantial control over the sector's market. It is not investing in startups based on performance but with the ultimate aim of getting control of the market through one entity. The Snapdeal investment is the best example to explain this, Softbank first bought a stake in Snapdeal then it went on to buy stake in Flipkart and then the merger talks give a hint about what was going to happen next, the talks did not workout and also Amazon was not leaving India at any cost.


Also there were talks of selling Freecharge (Bought by Snapdeal) to Paytm both having Softbank as an investor which did not work out well too, Freecharge then going to Axis Bank.


The recent Uber-Ola merger talks are also hinting at the same strategy. We have to wait to know the exact outcome of the talks but one thing is clear from these happening that Softbank has been adopting a strategy of Unite and Conquer by investing in rival firms in the same market and then looking out for possible merger and coalition opportunities.

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