Prosus has called off the $4.7 billion acquisition of BillDesk announced last year, once slated to be the European tech giant’s largest acquisition, and said “certain conditions precedent” were unfulfilled in a surprising move a month after the proposed acquisition received approval. got to proceed from the local antitrust watchdog.
“Certain conditions precedent were not fulfilled on 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,” Prosus said in a statement Monday without identifying those conditions. .
The cash acquisition, announced at the peak of the bull cycle last year, would become the second largest M&A deal in the South Asian consumer internet market. In recent quarters, as the market changed, many promised deals worldwide have fallen apart.
Prosus, which has invested more than $5.5 billion in India, has also lost a significant amount of value in the past year. It has sold stakes in other companies (Tencent and JD.com) in recent months.
The deal would have enabled Prosus, which already owns the fast-growing PayU, to dominate the payment processing market in India. BillDesk arranges payments for most Indian government departments. At the time of the acquisition, Prosus said the high price tag was justified due to the scalability of the combined businesses.
Indeed, Prosus now believes that the payments market in India has shown cracks in recent quarters, a person familiar with the matter told londonbusinessblog.com. It is unclear whether Prosus and BillDesk had agreed a termination fee. BillDesk did not immediately respond to a request for comment. The move to end the deal came as a surprise to BillDesk’s founders and its investors, according to three people familiar with the matter.
Founded by three consultants, the BillDesk founders were able to earn $500 million each from the acquisition agreement. BillDesk — which counts Visa, Temasek, General Atlantic and a number of Indian banks among its lenders — has raised $245 million so far. It was valued at $1.59 billion after the January 2019 funding round, according to research firm Tracxn.
Before closing the deal with Prosus, BillDesk internally planned to make an initial public offering. PayU and 20-year-old BillDesk process a significant number of payment transactions in India. If they were combined, they would have held more than 40% of the Indian market, more than their closest competitor (Razorpay), according to industry estimates.
“Together, PayU India and BillDesk will be able to meet the evolving payment needs of digital consumers, merchants and government enterprises in India and provide state-of-the-art technology to even more excluded segments of society, while adhering to to the regulatory environment in India and providing robust consumer protections,” Prosus said at the time of proposing the acquisition.