UK competition watchdog clears acquisition by Fiserv of First Data Corporation

Maria Nikolova

The CMA has decided not to refer the merger to a Phase 2 investigation.

The acquisition of First Data Corporation by Fiserv, Inc. has received clearance from the UK Competition and Markets Authority (CMA). Earlier today, the regulator posted an announcement stating that it has decided, on the information currently available to it, not to refer the merger to a Phase 2 investigation under the provisions of the Enterprise Act 2002.

In May this year, the regulator said it was considering whether it may be the case that this transaction if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services. Today’s decision is supportive of the deal.

The merger was first announced in January this year.

The deal is set to unite two premier companies to create one of the world’s leading payments and financial technology providers, and an enhanced value proposition for its clients.

Under the terms of the agreement, First Data shareholders will receive a fixed exchange ratio of 0.303 Fiserv shares for each share of First Data common stock they own, for an equity value of $22 billion. This represents $22.74 based on closing prices as of January 15, and a premium of 29% to the five-day volume weighted average price as of that date.

Following the close of the transaction, Fiserv shareholders will own 57.5% of the combined company, and First Data shareholders will own 42.5%, on a fully diluted basis. The all-stock transaction is intended to be tax-free to First Data shareholders.

The combined entity will offer leading technology capabilities that enable a range of payments and financial services, including account processing and digital banking solutions; card issuer processing and network services; e-commerce; integrated payments; and the Clover™ cloud-based point-of-sale solution. The combined company will offer comprehensive distribution channels and have deep expertise in partnering with financial institutions, merchants and billers of all sizes, as well as software developers.

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