Prosus Ventures has called off the $4.7 billion merger of BillDesk it announced last year, saying “certain conditions precedent” were not fulfilled in a surprising development a month after the proposed acquisition received approval from the local antitrust watchdog.
“Certain conditions precedent were not fulfilled by the 30 September 2022 long stop date, and the agreement has terminated automatically in accordance with its terms and, accordingly, the proposed transaction will not be implemented,” Prosus said in a statement Monday without identifying what those conditions were.
The all-cash acquisition, announced at the peak of the bull cycle last year, was slated to be the second largest M&A deal in the South Asian market’s consumer internet space. In recent quarters, as the market has turned, many promised deals have fallen apart. Prosus, which has invested over $5.5 billion in India, has lost a considerable amount of value in the past one year, too. It has been selling stakes in other firms (Tencent and JD.com) of late.
The deal would have allowed Prosus, which already owns fast-growing PayU, to dominate the market of payments processing in India. Prosus indeed believes the payments market in India has shown cracks in recent quarters, a person familiar with the matter told TechCrunch.
It’s unclear if Prosus and BillDesk had agreed for a termination fee. BillDesk did not immediately respond to a request for comment.
Founded by three consultants, BillDesk founders stood to make $500 million each from the acquisition deal. BillDesk — which counts Visa, Temasek, General Atlantic and a number of Indian banks among its backers — has raised $245 million to date. It was valued at $1.59 billion after January 2019 funding round, according to research firm Tracxn.
Prior to doing the deal with Prosus, BillDesk was internally planning to file for an initial public offering. PayU and 20-year-old BillDesk process a significant number of payments transactions in India. If combined, they would have assumed a clear lead in the Indian market, according to industry estimates.
“Together, PayU India and BillDesk will be able to meet the changing payments needs of digital consumers, merchants and Government enterprises in India and offer state-of-the-art technology to even more of the excluded sections of society, while adhering to the regulatory environment in India and delivering robust consumer protection,” Prosus said at the time of acquisition announcement.