- Prosus, the company behind PayU, has ended a $4.7 billion deal to acquire
BillDesk . - The company has announced that certain suspensive conditions had not been met by the end of September.
prosus had announced the deal in August last year.
PayU owner Prosus NV has terminated a $4.7 billion (approximately Rs 38,400 crore) deal to acquire Indian payment company BillDesk after the terms of the deal were not met.
In a statement, Prosus said certain conditions precedent had not been met by the late September deadline.
The Competition Commission of India (CCI) approval, one of the conditions precedent, was received on September 5, but Prosus did not specify which other conditions had not been met.
A condition precedent is a provision that defines certain conditions that must occur or that either party must comply with to ensure the progress or performance of a contract.
BillDesk’s merger with Prosus’ PayU would have created a digital payments giant with an annual total payment volume (TPV) of $147 billion.
Its closest rivals in India such as Razorpay and CCAvenue, which are owned by Infibeam, are estimated to have annual TPVs of over $50 billion and $18-20 billion respectively.
This would be the largest acquisition of Prosus, a Dutch e-commerce company.
Prosus had announced on August 31 last year the acquisition of BillDesk in an all-cash deal to expand its footprint in India’s booming fintech sector under the umbrella of its payment gateway PayU.
There is no break-free associated with the deal.
Prosus, which is largely owned by Naspers, serves more than 450,000 merchants with more than 100 payment methods. Prosus is a long-term investor and operator in India that has invested nearly $6 billion in tech companies such as Swiggy and Pharmeasy since 2005, it said.
Founded by three consultants from Arthur Andersen LLP – MN Srinivasu, Ajay Kaushal and Karthik Ganapathy – in 2000, BillDesk benefited from strong growth in digital payments as smartphone adoption grew and internet access became ubiquitous. The founders would have raised $500 million each from the deal.
“The closing of the transaction was conditional on the fulfillment of several conditions precedent, including approval from the CCI,” Prosus said in a statement.
Although CCI approval was obtained on September 5, 2022, “certain conditions precedent were not met by the long shutdown date of September 30, 2022 and the agreement has automatically terminated in accordance with the terms and accordingly, the proposed transaction will not be executed.” it said.
It remains committed to the Indian market and expanding its existing business in the region, Prosus statement said.
Launched before the term fintech even existed, BillDesk – which private equity firm General Atlantic considers the largest shareholder with a stake of about 14.2 percent – is said to have the largest number of corporate clients among payment gateways in India.
It offers solutions ranging from settlements, direct debits, reconciliations and automatic settlements. It also works with companies in categories such as billing, utilities, direct consumer purchasing, government payments, financial services, and telecom.
TA Associates held a 13.1 percent stake, while Visa held 12.6 percent in the company. The three founders owned nearly 30 percent shares.
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