India's Biggest E-Commerce Merger at Risk as Billionaire Objects

Flipkart Online Services Pvt.’s planned acquisition of rival Indian e-commerce provider Snapdeal has hit a snag that may put the deal in jeopardy, or at least substantially drive down Snapdeal’s valuation from a previously agreed-upon $1 billion.

One of the smaller investors in Snapdeal, the family office of billionaire Azim Premji, objects to special payments to certain shareholders including its two co-founders and two early backers, according to people familiar with the discussions. Flipkart had earlier told Snapdeal that it wants all the startup’s investors to agree to deal terms as a precondition of the transaction, said the people, who asked not to be identified discussing information that’s not public.