Financial technology provider Fiserv has agreed to acquire rival US financial services company First Data in an all-stock transaction worth $22bn.
Image: Fiserv offices in Hillsboro, Oregon. Photo: Courtesy of M.O. Stevens/Wikipedia.org
The proposed merger of Fiserv and First Data will create a new payment and financial technology provider. The combined company is also expected to have increased scale, expanded presence while providing more extensive variety of high-value client solutions.
The parties believe that their combination will provide technology capabilities that will facilitate a range of payments and financial services. Included in these are account processing and digital banking solutions, card issuer processing and network services, e-commerce, integrated payments, and also the Clover cloud-based point-of-sale solution.
Through the merger, Fiserv and First Data plan to link their respective merchant and cash management capabilities to develop new offerings further and providing the latter’s Clover cloud-based platforms for small and medium-sized businesses.
Fiserv president and CEO Jeffery Yabuki said: “Through this transformative combination, we expect to redefine the manner in which people and institutions move money and information.
“We admire First Data for its excellence in merchant acquiring and global issuing services, and the tremendous progress they have made under Frank’s leadership. We expect this combination to catalyze and support an enhanced value proposition for our collective clients and their customers.”
As per the agreement terms, First Data shareholders will be issued 0.303 shares of Fiserv for each First Data share they own. Following the merger, current shareholders of Fiserv will own a stake of 57.5% in the combined company while their First Data counterparts will own the remaining stake of 42.5%.
First Data chairman and CEO Frank Bisignano said: “I have long admired what Fiserv has achieved over the years, and I look forward to working with the talented associates of both companies as we set a higher standard of innovation and service in the industry.
“Our goal at First Data has always been to provide our clients with the most comprehensive suite of innovative, highly-differentiated solutions and services, and I am excited by the significant value that the combination with Fiserv creates for all stakeholders.”
Subject to customary closing conditions, receipt of regulatory approvals and also shareholders’ approvals on either side, the transaction is likely to be completed during the second half of 2019.
In the second half of 2018, Fiserv acquired the third-party debit processing solutions of US Bancorp’s Elan Financial Services, in a deal worth about $690m.