Both Carousell and Telenor did not make any gain from the merger, so why did the merger even happen in the first place?

Jacky Yap  |  SG
Published 2019-11-22 13:45:45

One of the biggest news that came out earlier yesterday was the news of Carousell merging with Norwegian telco Telenor Group-owned classified site 701Search.

Following this merger, Carousell is now valued at US$850 million (S$1.16 billion).

This means that it has reached the much desired “unicorn” status — a coveted standing reserved for companies with over a billion-dollar valuation — in Singapore (based on Singapore dollars conversion).

For a deeper look into the merger, let’s first establish some financial background and timeline:

701Search was founded in 2006 by SPH Interactive International and Norway’s Schibsted Classified Media. Both are equal partners. In 2013, Norwegian telco Telenor Group came onboard as a third equal partner.  In May 2017, SPH sold its 33.3% stake in 701Search for about US$109 million. This values 701Search at US$330 million (S$450 million). However, according to the annual report of Telenor Group, the valuation was recognised at US$295 million as Telenor paid a total of NOK 1.8 billion for 66.7% in cash consideration. According to the same annual report, between 11 May 2017 and 31 December 2017, 701Search contributed NOK 66 million (US$7.2 million) worth of revenue to the group financials.  In April 2019, Carousell announced that it has merged with OLX Philippines, at a deal worth US$550 million. With the 701Search merger, it is reported that Carousell is now worth US$850 million.Looking at these numbers, several questions come to mind.


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