Ally Financial announces termination of proposed merger with CardWorks
The parties to the deal have mutually agreed to terminate their merger agreement.
Ally Financial Inc (NYSE:ALLY) and Cardholder Management Services, Inc. (CardWorks) on Wednesday announced that they have mutually agreed to terminate their merger agreement, which had been announced on February 18, 2020.
The board of directors for each company approved the termination after taking into account the impacts of COVID-19 on global markets and the economy. Neither party will incur any termination or break-up fees as a result of the mutual decision to terminate the merger agreement.
Ally Chief Executive Officer Jeffrey J. Brown, commented:
“Given the unprecedented economic and market conditions resulting from the COVID-19 global pandemic, Don Berman and I, along with our boards of directors, believe it is in the best interests of our customers and stakeholders to terminate the agreement. This was a difficult decision to make following a long process to bring two strong companies together. I want to express my deep appreciation for the considerable efforts and incredible commitment demonstrated by Ally and CardWorks employees.”
Back in February, Ally Financial said it had entered into a definitive agreement to acquire CardWorks in a transaction valued at approximately $2.65 billion. Under the terms of the agreement, Merrick Bank, a wholly owned subsidiary of CardWorks, Inc., would have merged into Ally Bank.
The acquisition of CardWorks was supposed to further diversify Ally’s product offerings, adding an established credit card platform, full-spectrum servicing and recovery operation and a nationwide merchant acquiring business.
