PayU calls off $4.7 bn deal to buy BillDesk
Chennai: One of the largest deals in the fintech space, the acquisition of BillDesk by Netherland-based Prosus, the parent of PayU, has been called off.
In August 2021, PayU had announced the acquisition of the Indian online payment gateway firm BillDesk for $4.7 billion. The transaction received the approval of antitrust watchdog Competition Commission of India (CCI) in September 2022.
"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 said in a stock exchange filing. The company did not elaborate on the conditions that were not met.
If the deal was closed, the duo would have become one of the largest online payment providers globally, handling a total payment volume of nearly $147 billion.
Prior to the BillDesk deal, PayU had acquired CitrusPay, Paysense, and Wibmo. With the BillDesk deal, Prosus’ investment in India would have gone up to over $10 billion.
According to industry estimates, BillDesk enjoys a 25-30 per cent market share in the online payment aggregator space, followed by Razorpay at 15-20 per cent and PayU with 10-15 per cent.
BillDesk—founded by M.N. Srinivasu, Ajay Kaushal and Karthik Ganapathy in 2000—benefited from a surge in growth in digital payments. It provides solutions ranging from settlements, collections, reconciliations, and auto settlements. It also partners with companies in billing, utility payments, direct-to-consumer procurement, government payments, financial services, and telecom.
The company’s revenues had grown by 17.7 per cent to Rs 2,124.2 crore in FY21 as compared to Rs 1,804.7 crore in FY20.
With the termination of the deal, BillDesk will not be able to give an exit to its investors. TA Associates held a 13.1 per cent stake while Visa had 12.6 per cent in the firm. The three founders had close to 30 per cent shareholding.
The development will also slow the pace of growth of PayU in the Indian market.