BANGALORE (TIP): Putting an end to months of speculation about what is being termed as the biggest acquisition in the Indian e-commerce business, domestic e-retailer Flipkart announced that it has acquired rival and leading fashion e-tailer Myntra.com.

The move is widely being read as a response to global e-commerce leader Amazon’s ramp up of its year-old India operations, and the narrowing gap between Flipkart’s sales and that of fast-growing rival Snapdeal. No details on the deal size or structure were shared, and analyst speculation pegging the buy out at over $300 million remained unconfirmed by both companies.

Both companies will be run independently, with no immediate plans to merge the fashion business on the two portals or even join forces in terms of content or go-to market. Myntra CEO Mukesh Bansal joins Flipkart’s board, and will head the fashion vertical at Flipkart and Myntra. They also announced that while Myntra employees would “remain in current positions”, they would be offered stock options in Flipkart.

Flipkart co-founder Sachin Bansal insisted that this was a “completely different acquisition story” as it was not “driven by distress”, alluding to a plethora of small e-commerce players either having wound up or been bought over in the past two years.

Together, both company heads claimed, they were scripting “one of the largest ecommerce stories”. $100 m investment in fashion vertical Mukesh Bansal said that on its own Myntra.com held 30 per cent of the market share, but together the two companies would account for 50 per cent of the online fashion market. “We hope to take this figure to about 60-70 per cent in the long-term,” he said. Mr. Sachin Bansal added that Flipkart would invest $100 million in its own fashion vertical in the near-term.

While the electronics vertical is the largest revenue generator at Flipkart (and will continue to be even after the acquisition), Mr. Bansal hoped that in the near-term fashion would be the “largest sales category for Flipkart”. Flipkart started fashion as a shopping category on its site two years ago.