However, a Swiggy spokerperson termed this a baseless speculation and denied to further comment over it.
Online restaurant search app Zomato is reportedly in initial round of merger talks with its biggest rival, Swiggy. However, experts believe that it is highly unlikely that the two companies will be able to seal the deal.
Cited sources close to the development, a report in Economic Times stated that the management of the two companies, were held a recently, but have failed to progress as differences in business alignment and expected valuations prove difficult to resolve.
The report further mentioned that Zomato is in favour of a stock-based merger, while Swiggy wants to acquire and operate the food delivery business of the Gurgaon-based rival.
"Zomato could have continued with the search and restaurant discovery business while continuing as a shareholder in Swiggy," a source told ET.
"Swiggy was more interested in exploring the merger at existing valuation, but Zomato's proposed swap ratio would have valued it at $225 million," the person said.
However, a Swiggy spokerperson termed this a baseless speculation and denied to further comment over it.
"Swiggy has a razor-sharp focus in delivering a superior customer experience as we continue to grow as India’s largest food ordering and delivery company. We would not like to comment on baseless speculations such as this, " he said.
Earlier in September, Zomato had said that it will forgo commissions charged to restaurants on food orders as it is generating cash in its core advertising business to fund new initiatives, including food ordering.
In case if the merger between the two firms really happens then both the companies will have an edge to rule the food ordering business in India.
Founded by Rahul Jaimini, Sriharsha Majety and Nandan Reddy, Swiggy is a food ordering and delivery company based out of Benagluru.
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