India’s biggest fintech M&A deal falls through: PayU cancels BillDesk acquisition

The biggest merger and acquisition (M&A) deal in the Indian fintech space has fallen through, with Prosus-backed PayU calling off its acquisition of BillDesk. The acquisition, for a total consideration of $4.7 billion, was announced on August 31, 2021.

In a statement issued on Monday, Prosus said: “The completion of the transaction was subject to the fulfillment of various conditions, including the approval of the Competition Commission of India (CCI). PayU secured CCI approval on September 5, 2022. However, certain conditions were not met by the long cut-off date of September 30, 2022, and the agreement has automatically terminated in accordance with the terms and, accordingly, the proposed transaction will not be fulfilled. implemented.”

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 Indian digital payment provider BillDesk.

While the deal got the go-ahead from the CCI only in September, it was yet to receive approval from the Reserve Bank of India (RBI). The process should take at least 45 days.

Prosus, a long-term investor and operator in India, has invested close to $6 billion in Indian technology companies since 2005. It said it remained committed to the Indian market and to growing its existing businesses in the region. Some of the other investments include Meesho, Byju’s, DeHaat, Mensa Brands and Good Glamm Group.

This acquisition would have made PayU the largest player in the digital payment (B2B) segment. At the time of the acquisition announcement, PayU India CEO Anirban Mukherjee had told Business Standard that the synergies of both companies would lead to more new products being launched on the market.

“We know where some of the synergies are. For example, they are very strong in government bill payments and financial services.

We are much more focused on e-commerce and SMEs. There are synergies where their products apply to our customers and vice versa. As LazyPay can access their payment pages. The bigger conversation will happen when we close this deal. I feel this kind of scale can drive a different level of innovation and access to market. We have a lot of complementary strengths and I hope that we will have a lot of ideas to take this to drive the digitization of the last mile much faster in India,” he said.

During the announcement, PayU had estimated that the combined entity would process total payment values ​​(TPV) of $152 billion based on FY21 figures. BillDesk is one of the biggest players in the payment aggregator space, especially with its early-mover advantage as well as a strong hold on the utility payment space. Industry estimates suggest that BillDesk’s market share is in the range of 25-30 percent. The second largest player is Razorpay, with a share of around 20 per cent.