Alibaba is in talks with Indian smartphone maker Micromax Informatics to acquire a stake of approximately 20 percent in the company, Reuters reports, citing several unnamed people with direct knowledge of the matter. The deal would see Alibaba investing over USD 1.2 billion in Micromax, valuing the Indian company at up to USD 6 billion, two of the people said.
Micromax and Alibaba started negotiations on the stake sale after discussions with investors led by Japanese company Softbank failed over differences in valuations, the sources said. "The Softbank talks are not officially over, but it'll be hard to get back on track," said one of the people.
According to the same sources, Alibaba wants to use the Micromax deal to enter the boom in the number of internet users in India. "Talks are centered around using Micromax devices as a platform to get into a serious business of its own in India," said one of the sources, referring to Alibaba.
Micromax, SoftBank and Alibaba declined to comment on the matter.
