Also in this letter:
■ Prosus junks BillDesk deal: a look at the biggest failed ‘tech-overs’ ever
■ PhonePe shifts headquarters from Singapore to India
■ Seven-year-old boy dies after electric scooter battery explodes
Prosus scraps $4.7 billion PayU-BillDesk deal after CCI nod
Prosus said on Monday it has decided to call off its $4.7 billion deal to acquire Indian payments gateway firm BillDesk through its Indian subsidiary PayU Payments.
Why? According to a blog post by Eoin Ryan, head of investor relations at Prosus, “certain conditions precedent were not fulfilled by the September 30, 2022, long stop date”, causing the agreement to be terminated automatically. He did not specify what these conditions were.
Catch up quick: On August 31, 2021, Prosus announced it would acquire BillDesk for $4.7 billion in an all-cash deal to expand its footprint in the country’s booming fintech sector through its payment gateway PayU. This was pegged as the second-largest M&A in India after the Walmart-Flipkart deal in 2018.
CCI nod: On September 6, India’s market watchdog CCI cleared PayU’s acquisition of BillDesk after a year-long wait. PayU had to answer several questions from the regulator after the deal was announced in August 2021, and submitted a revised merger notification in April.
Big picture: The merger was expected to create a payment gateway giant that would process $147 billion in annualised total payments value (TPV), more than twice that of its nearest contender Razorpay, which processes $80 billion in annual TPV.
Prosus CEO Bob van Dijk said in the company’s annual report in June that the merger would create a “top-10 online payments company globally”, substantially increasing the company’s scale in India and strengthening its digital banking arm – “pending regulatory approval.”
Prosus, which has backed the likes of Swiggy, Byju’s and Pharmeasy, has invested $6 billion in India’s technology startups since 2005.
As Prosus drops BillDesk deal, here are the biggest failed ‘tech-overs’ ever
Prosus’s $4.7 billion deal to buy BillDesk would have been one of the largest ever in India’s technology sector, but how does it compare with the world’s biggest tech takeover deals that went south? It’s of course dwarfed by the biggest failed ‘tech-over’ deal ever – Broadcom’s $177 billion hostile bid to acquire Qualcomm, which fell apart in May 2018.
Just two months after that, Qualcomm itself was forced to walk away from a $44 billion bid to acquire NXP Semiconductors after Chinese regulators blocked the deal. That sum, incidentally, is exactly what Elon Musk agreed to pay for Twitter in April 2022 before changing his mind, so the odd couple may soon join this list if Musk wins in court later this month.
Until then, here are the biggest M&A deals ever that fell apart.
Broadcom and Qualcomm: $117 billion (2018)
On November 6, 2017, Broadcom made an unsolicited $103 billion bid to acquire Qualcomm, which rejected the takeover bid the following week, saying the offer – which worked out to $70 a share – undervalued the company and would face regulatory hurdles.
The words proved prophetic. By mid-May the following year the deal was dead in the water after President Donald Trump halted it over national security concerns.
Qualcomm and NXP Semiconductors: $44 billion (2018)
In July 2018, Qualcomm itself became a high-profile victim of a bitter China-US trade spat when it paid a $2 billion breakup fee to walk away from a $44 billion deal to buy NXP Semiconductors after failing to secure approval from Chinese regulators.
The deal would have been the biggest semiconductor takeover globally after Broadcom’s attempt to acquire Qualcomm fell through earlier that year.
Click here for the full list
PhonePe shifts headquarters from Singapore to India
Fintech platform PhonePe announced on Monday it has completed the process of moving its domicile from Singapore to India.
The whole shebang: The company said in a statement it has moved all businesses and subsidiaries of PhonePe Singapore to PhonePe Pvt Ltd – India directly, including its insurance broking services and wealth broking businesses.
Twists and turns: PhonePe, founded by former Flipkart executives Sameer Nigam, Rahul Chari and Burzin Engineer, was bought by the ecommerce company in 2016. Two years later it became a part of Walmart after the US retail giant acquired Flipkart.
PhonePe had in 2019 received in-principle approval from Flipkart’s board to be hived off as a separate entity. In June 2022, ET reported that the separation process was underway and executives at PhonePe were looking to formally close it in another month or two.
Seven-year-old boy dies after electric scooter battery explodes
A seven-year-old boy was killed after the battery of an electric scooter exploded while it was being charged in Palghar on Sunday. The boy, who was seriously injured in the incident, was shifted to a hospital where he succumbed to his injuries. A case has been registered at Manikpur police station and an investigation is underway.
Epidemic: A spate of electric scooter fires in India has sparked safety concerns among some buyers and dampened sales, we reported previously.
In April, a video of an Ola e-scooter engulfed in flames went viral online, triggering a government probe. Around the same time a scooter from startup Pure EV also caught fire and a burning Okinawa Autotech bike killed two people.
Then on September 13, a fire that started at an electric scooter showroom in Secunderabad killed at least eight people and injured 11, Reuters reported. It was the deadliest such incident involving electric vehicles in the country.
Nykaa board approves 5:1 bonus shares issue
Shares of FSN E-Commerce, the parent company of Nykaa, rallied 11% to an intra-day high of Rs 1,414 on Monday after the company announced a 5:1 bonus share issue. The stock closed the day at Rs 1,304.20, up around 2.5%.
Details: The company approved bonus share issuance at its board meeting on Monday. In its filing with the exchanges, the company said its board has approved “bonus issue of equity shares in the proportion of 5 fully paid-up equity share of Re 1 each for every 1 fully paid-up equity share of Re 1 each held by the shareholders of the company as on the record date, subject to shareholders’ approval by way of postal ballot”.
The company has fixed November 3, 2022, as the record date for determining investors’ eligibility for the bonus share issue.
Jargon buster: Bonus shares are additional shares issued for free to shareholders as per their shareholding in the stock. Generally, the company issues bonus shares from its free reserves and surplus.
Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai. Graphics and illustrations by Rahul Awasthi.
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