Prosus acquires India’s BillDesk for US$4.7 billion


M&A Update

Prosus, the investment arm of South Africa’s Naspers Internet Group, has agreed to acquire India’s BillDesk for US$4.7 billion and merge it with its own PayU payment business. This is one of the largest transactions in the history of the country’s fast-growing digital payment sector.

The two companies said on Tuesday that the all-cash acquisition of BillDesk, India’s oldest payment gateway, will create one of the world’s largest online payment providers with a total annual payment of US$147 billion.

Prosus, listed in Amsterdam, focuses on India to expand the international Internet empire, including Takeaway And classified ads, but it specifically expects that the global shift from cash payments to online payments will become an important part of its future growth.

BillDesk is “the true definition of India’s success story… Combination [with PayU] Will become a leading local and global digital payment company,” said Bob Van Dyke, CEO of Naspers and Prosus. The acquisition is subject to regulatory approval.

Among other Indian investments, Prosus owns a Swiggy’s shares, The country‚Äôs largest food delivery company, raised $1.25 billion from investors last month. The scale of BillDesk’s acquisition is compared with the US$6 billion invested by Naspers and Prosus in the Indian payment sector since 2005.

India “will also become an important driving force for our growth in the next ten years… India is still our number one investment destination,” Van Dijk said.

According to data from the Reserve Bank of India, the number of digital retail payments in India has increased by four-fifths since 2018-19, reaching 44 billion in 2020-21. The two companies said that by merging with BillDesk, PayU’s share of these transactions will increase fourfold to 4 billion.

BillDesk, headquartered in Mumbai, was founded in 2000 and has a large share of government portal billing and payment processing.It recently joined a bank-led consortium that is bidding to establish a new Retail payment infrastructure in India.

MN Srinivasu, co-founder of BillDesk, said: “This investment by Prosus confirms the significant opportunity for digital payments in India, which is being driven by the innovative and progressive regulatory framework implemented by the Reserve Bank of India.”

Prosus is most famous Because it holds nearly 29% of the shares of Chinese Internet group Tencent, Tencent dominates the market value of the company and its South African parent company, causing its share price to discount other investments.

Naspass Prosus listed In 2019, to accommodate its international investment and solve the discount problem, Tencent’s shares are still so large that Naspers dominates the Johannesburg stock market, forcing investors to limit their exposure.

Naspers and Prosus have gradually Reduce holding of Tencent shares Over the years, a multi-billion dollar war fund has been established for acquisitions.The two companies also completed a Share swap This month, Naspers will reduce its direct holdings in Prosus, thereby reducing its weight in the local market.

Prosus now owns 49% of Naspers, and Naspers owns more than 56% of investment vehicles. Investors are hesitant about the complexity of the cross-shareholding structure.

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