Worldline's deal to acquire Ingenico includes a key existing collaboration that allows the companies to compete with the large issuer/merchant services tie-ups from from 2019.
Worldline and Ingenico will access the German Savings Bank Group, which will support technology development and payment services for both banking and payments. That was also a main goal of more than $100 billion in earlier deals, such as Fiserv's acquisition of First Data, FIS' purchase of WorldPay and Global Payments merger with TSYS.
Overall, The €7.8 billion (about $8.6 billion) acquisition of Ingenico by Worldline will create the world’s fourth largest payments company and a juggernaut in merchant services.
The combined companies will have 2019 estimated net revenues of €5.3 billion (about $5.8 billion) with almost half of the revenues being generated in merchant services. The acquisition places a 24% premium on Ingenico based on its average valuation over the last month. Upon closing of the acquisition, Worldline stockholders will own 65% of the entity with the remaining 35% being held by Ingenico stockholders. The transaction is expected to close in the third quarter of 2020 pending traditional regulatory, employee union and shareholder approvals.
“I am proud to announce that today is a great day for Worldline and for Ingenico, and more widely for our Payment industry: Together we create the European World-Class leader in digital payments,” said Gilles Grapinet, Worldline’s chairman and chief executive, in a press release.
The combined entity will process upwards of €300 billion (about $330 billion) in merchant acquired purchase volume and Worldline estimates that the new company will have approximately 20% market share in European financial services.
The new company will serve about 250,000 e-commerce customers and websites, with acceptance of more than 350 payment methods and connection to more than 150 local acquirers.
Worldline’s board of directors will expand to 17 members with six new members coming from Ingenico.
In the event that the acquisition does not go through as a result of a material breach by Worldline, Worldline has agreed to pay Ingenico a termination fee of €200 million (about $220 million).