Dutch investment group, Prosus, which owns the payment gateway PayU, has reportedly called off the $4.7 billion takeover of Indian payments aggregator, BillDesk, terminating what would have been the largest M&A deal in the Indian fintech sector.

Back in August 2021, PayU announced the acquisition of BillDesk, even receiving approval from the Competition Commission of India earlier in September this year with the approval from the Reserve Bank of India, the country’s central bank, awaiting.

In a statement, the Naspers-owned group said that certain conditions were not met by 30th September 2022, and that the agreement was terminated automatically as per the terms and therefore, the proposed transaction will not be executed.

This is the first time that such a huge deal has been canceled even after the firms signed bunding agreements and obtained approval from the anti-competition watchdog.

A source claimed that the Indian teams of the two companies were informed on the same day as the announcement was made public. 

When asked about further details regarding the unfulfilled conditions and other things, Prosus stated that there is nothing more that can be revealed that what has already put in the statement. The company further added that the decision taken by the board is final and that deal is not being revised.

The statement also said that the Dutch group is still committed to the Indian market and is expanding its current businesses within the region. To date, Prosus has invested nearly $6 billion in India in the tech sector since 2005.

Industry sources have cited the global meltdown and changing regulatory situation as the reason behind the termination of the deal, which would have been the second-largest M&A transaction in the Indian startup ecosystem, after the $16 billion takeover of Flipkart by Walmart.

A source suggests that Naspers' significant stake in Chinese tech giant Tencent was being impacted by the deal, which might have led to the rethinking of the deal.

Last month, the South African group claimed it was pairing its share in Tencent, and moved $7.6 billion worth of shares for market trading on Hong Kong’s CSSO.

Source credit: https://www.business-standard.com/article/companies/india-s-largest-fintech-m-a-deal-falls-through-payu-calls-off-billdesk-buy-122100300422_1.html