Walmart-owned e-commerce company Flipkart is ready to acquire travel solutions and hotel booking platform, Cleartrip in a distress sale. People aware of the matter said that with the deal likely to be announced in the next few days, the Walmart-owned e-commerce giant plans to strengthen its presence in the hospitality segment.

Flipkart will use Cleartrip to gain an edge against US e-commerce giant Amazon and establish its supremacy in India’s booming e-commerce market. The Walmart-owned e-commerce platform aims to diversify and venture into other product categories such as online booking of hotels and flights. This will help in boosting its overall gross merchandise value (GMV).

Sources say that the deal valuing at almost $40 million may close in the next 10 days. The deal takes place amidst challenging times, when the hospitality industry continues to recover from the constant attack of the coronavirus pandemic.

This acquisition will enable Flipkart to establish a strong footing in the competitive online travel space. The e-commerce company will also be able to play off against leading players such as Makemytrip, Yatra, and Booking.com.

By acquiring Cleartrip, Flipkart can now directly venture into the travel and hospitality segment, which it used to offer earlier through partnerships. The e-commerce company will also be able to cross-sell financial products and services such as insurance and payments for travel bookings trough Cleartrip.

Flipkart has been on a massive acquisition spree lately. The company believes that the pandemic has changed consumer behavior and increased online adoption, and hence, it plans on delivering excellent consumer experiences through several investments.

Cleartrip earns more than 80% of its revenue from airline bookings; however, it reported a 2.5% drop in revenues in the year 2020. Apart from planning to obtain the controlling stake in Cleartrip, Flipkart is picking up an 8% stake in Aditya Birla Fasjion through its fashion e-tailer Myntra. It is also investing in Arvind Youth Brands, which gives it rights to popular apparel brands such as Flying Machine.