Mergers and Acquisitions Updates
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Prosus, the investment group of the South African Naspers internet group, has agreed to buy the BillDesk from India for $ 4.7 billion and merge it with its own PayU payment company, in one of the largest transactions ever in the country’s fast-growing digital payment sector.
The acquisition of all cash from BillDesk, India’s oldest payment gateway, will create one of the largest online payment providers in the world with an annual total payment volume of $ 147 billion, the companies said on Tuesday.
The listed Prosus in Amsterdam focuses on India to expand an international internet empire that includes it food delivery and classified advertising, but it particularly expected that the global shift from cash to online payments would yield a significant portion of its future growth.
BillDesk is actually the definition of an Indian success story. . . the combination [with PayU] will be a leading digital payment company locally and globally, ”says Bob van Dijk, CEO of Naspers and Prosus. The acquisition is subject to regulatory approvals.
Among other Indian investments, Prosus owns a interest in Swiggy, the country’s largest food delivery company, which raised $ 1.25 billion from investors last month. The size of the BillDesk acquisition can be compared to the $ 6 billion that Naspers and Prosus have invested in India’s payment sector since 2005.
India “will also be an important driver for our growth in the next decade. . . India remains our number one investment destination, ”said van Dijk.
According to the Reserve Bank, the number of digital retail payments in India has increased by four-fifths since 2018-19 to 44 billion in 2020-21. PayU’s share in these transactions will quadruple to 4 billion by merging with BillDesk, the companies said.
Founded in 2000, Mumbai-based BillDesk has a large stake in billing and processing payments for government portals. It recently joined a bank-led consortium bidding for the license to establish a new one. retail payment infrastructure in India.
“This investment by Prosus confirms the significant opportunity in India for digital payments brought about by innovation and the progressive regulatory framework introduced by the Reserve Bank of India,” said MN Srinivasu, co-founder of BillDesk.
Prosus is most well-known for its nearly 29 percent stake in Chinese internet group Tencent, which dominates the market value of the company and its South African mother, which has reduced their share prices on their other investments.
Naspers light Prosus in 2019 to house its international investments and tackle the discount, but the Tencent share remains so large that Naspers dominates the Johannesburg stock market, forcing investors to limit their exposure.
Naspers and Prosus gradually cut off the Tencent stake over the years to build a multi-billion dollar war chest for acquisitions. The companies also have a exchange part this month to reduce Naspers’ sustained stake in Prosus, and thus reduce the weight of the local market.
Prosus now owns 49 percent of Naspers and Naspers just over 56 percent of the investment vehicle. Investors blocked the complexity of the cross-holding structure.
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