Prosus ends India’s BillDesk acquisition worth $4.7 billion

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Prosus Ventures has canceled the $4.7B acquisition of BillDesk that it announced last year. This surprising decision came a month after the local antitrust watchdog approved the acquisition.

Prosus, an Amsterdam-listed company, stated Monday that certain conditions precedent had not been met by the 30th September 2022 stop date. Accordingly, the agreement was automatically terminated in accordance to its terms. The transaction will therefore not be implemented.

This all-cash acquisition was announced during the bull cycle and was expected to be the second largest M&A transaction in South Asia’s consumer internet market. Many of the promises made in recent quarters have been canceled globally as the market has changed.

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Prosus, which invested more than $5.5 billion in India in the past year, also lost significant value. In recent months, it has sold stakes in JD.com and Tencent.

Prosus, already the owner of PayU, would be able to control India’s payments processing market. BillDesk is able to process payments for almost all Indian government departments. Prosus stated that the acquisition was justified by the scale of the combined businesses.

According to a source familiar with the matter, Prosus believes that the Indian payments market has been showing cracks in recent quarters. economicpitch was informed by a person who knows the truth about the matter.

It is not clear if Prosus had reached an agreement with BillDesk for a termination fee. BillDesk didn’t immediately respond to my request for comment.

Three consultants founded BillDesk. Each founder would make $500 million from the acquisition deal. BillDesk has raised $245 million so far. It counts Temasek and General Atlantic as its backers. According to Tracxn, it was valued at $1.59 Billion after the January 2019 funding round.

BillDesk had been planning to go public before the Prosus deal. The Indian payments system is a large one, with BillDesk 20 years old and PayU processing a substantial number of transactions. According to industry estimates, they would have captured more than 40% of India’s market if combined. This is far more than their nearest rival, Razorpay.

Prosus stated at the time that it was proposing the acquisition, “Together PayU India & BillDesk will enable us to meet the changing payment needs of digital consumers, merchants, and Government enterprises in India”

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