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Prosus, previously Naspers said it had terminated its much-awaited acquisition of Billdesk for $4.7 billion, a deal which would have been the second-largest buyout in the Indian internet sector.

As per the statement, certain conditions precedent were not fulfilled by the 30 September 2022 and the agreement has terminated automatically in accordance with its terms.

The note said:

On 31 August 2021, Prosus announced that an agreement had been reached between PayU Payments Private Limited (PayU), a subsidiary of Prosus, and the shareholders of the Indian digital payments provider BillDesk to acquire BillDesk for $4.7 billion.

Closing of the transaction was subject to the fulfilment of various conditions precedent, including approval by the Competition Commission of India (CCI). PayU secured CCI approval on 5 September 2022. However, 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 has been a long-term investor and operator in India – investing close to $6 billion in Indian technology companies since 2005. Prosus remains committed to the Indian market and growing its existing businesses within the region.

Roadblocks to acquisiton

There were several roadblocks the deal had faced from the beginning. It first came under the scrutiny of the CCI following its concerns over a ‘potential monopoly’ in the online payment gateway space. But after the clearance, the deal still seems to have fallen through.

Founded in 2000 by MN Srinivasu, Ajay Kaushal and Karthik Ganapathy, Mumbai-based BillDesk, operated by parent IndiaIdeas, provides online payment gateway services to help businesses with settlements, collections, reconciliations, and auto-settlements.

The company recorded consolidated operational revenue of Rs 2,124 crore in FY21 compared to Rs 1,804.69 crore in the previous year. During the same period, it clocked a profit of Rs 245.55 crore against Rs 211.22 crore in the year before.

Prosus acquiring Billdesk would have made it the second largest buyout in Indian internet startups. The first, being, Walmart’s $16 billion acquisition of ecommerce company Flipkart in 2018.