SoftBank Group Corp.'s Masayoshi Son and Amazon.com Inc. founder Jeff Bezos are heading for a clash in India.

SoftBank is closing in on an agreement to combine its e-commerce company Snapdeal with market leader Flipkart Online Services Pvt., creating a stronger domestic player to compete with the American behemoth, according to sources familiar with the matter.

To get the merger done, Son is willing to cut Snapdeal's valuation 85 percent to $1 billion, said the sources, who asked not to be named because the talks are private.