Delhivery to acquire rival Ecom Express in Rs 1,407 crore deal

MUMBAI: Delhivery is acquiring rival Ecom Express in an all-cash dealfor Rs 1,407 crore, the company said in a stock exchange filing on Saturday. The transaction which marks consolidation in the new-age logistics space comes amid mounting troubles for Ecom Express which stalled its public listing plans and laid off at least a few hundred employees earlier this year.“This is a distress sale for Ecom Express. The biggest challenge for them arose from the change in Meesho’sbusiness structure which moved to its in-house logistics service Valmo. Ecom Express got about 40%-50% of its business from Meesho. The market is such that it’s very difficult to replace even 10% of a company’s business,” said Satish Meena, advisor at market research firm Datum Intelligence.The acquisition, Delhivery said, will add to the company’s scale, strengthening its value proposition to clients. “Logistics is a scale-driven business where economies of scale lead to higher efficiencies, enabling players to provide higher quality services at more competitive prices,” the firm said. Post the acquisition which is expected to close in six months, most of the investors of Ecom Express will exit the firm. Warburg Pincus, British International Investment and Partners Group collectively hold over 80% shareholding in the company. Ecom Express which had filed for a Rs 2,600 crore IPO in August 2024 was last valued at about $878 million, data from market research firm Tracxn showed. Delhivery had last year accused Ecom Express of misrepresenting facts in its draft IPO papers.“The Indian economy requires continuous improvements in cost efficiency, speed and reach of logistics. We believe this acquisition will enable us to service customers of both companies better, through continued bold investments in infrastructure, technology, network and people. The founders and management of Ecom Express have established a high quality network and team, creating a strong foundation to integrate into Delhivery’s operations,” said Sahil Barua, MD & CEO at Delhivery in a statement.