Reasons why Prosus canceled the $4.7 billion PayU-BillDesk transaction

The $4.7 billion acquisition of online payments gateway company BillDesk by the Dutch-listed company’s Indian subsidiary PayU Payments has been canceled by Proses, the investment arm of South African multinational Naspers.

 

According to people in the know who spoke to ET, the “abrupt move” that was announced on Monday was largely brought on by the ongoing global market correction that made the transaction from a year ago “over-priced.”

The company’s decision to terminate the agreement comes just one month after India’s anti-trust watchdog, the Competition Commission of India (CCI), approved the general terms of the August 2021 deal.

After Walmart’s $16 billion acquisition of a majority stake in online retailer Flipkart in 2018, this ends what would have been the second-largest buyout of an Indian digital technology startup.

“Specific conditions precedent were not satisfied by the September 30, 2022 long stop date, causing the agreement to be automatically terminated,” wrote Prosus’ head of investor relations, Eoin Ryan, in a note that was posted on the company’s website. He didn’t speak further about these issues.

Top business executives keeping tabs on the deal’s development believe that the BillDesk-PayU deal’s pricing is under extreme pressure as a result of the recent sharp decline in the value of major US payments firms, which can range from 50 to 70%. When ET questioned Proses and MN Srinivasu about the de’s termination, neither party responded.

FAQ

• How much transaction amount get canceled?

Ans.  $4.7 billion

• What is the name of the payment company?

Ans. BillDesk

• What is the full form of CCI?

Ans. Competition Commission of India