The Department of Justice has cleared VeriFone's acquisition of rival Hypercom after the firms agreed to sell the latter's US point-of-sale terminals business to private equity company Gores Group.
Having agreed to buy its smaller rival in November for $485 million, VeriFone moved in April to allay competition fears by inking a deal to sell Hypercom's US business to another player, France's Ingenico.
However, the DoJ was not appeased, filing a civil antitrust suit in the US District Court in Washington, DC, saying the acquisition would "substantially lessen competition" in the US POS market because Ingenico is already a major player.
After the suit was filed VeriFone and Hypercom abandoned the proposed divestiture to Ingenico and entered into settlement negotiations with the department to find an alternative buyer.
The DoJ has now filed a proposed settlement, which requires the divestiture to Gores of the Hypercom POS business, including physical assets, personnel, intellectual property rights "and all other assets necessary for Gores to become a viable competitor in this industry".
If the assets are not sold to Gores within 20 days following entry of the final judgement, a trustee will be empowered to sell them to another buyer acceptable to the US, in its sole discretion.
Christine Varney, assistant attorney general in charge of the DoJ antitrust division, says: "The Department of Justice's proposed remedy ensures that competition will remain in point-of-sale terminals markets. The proposed sale of the Hypercom assets to Gores will create an independent and significant competitor in the United States, both right now and into the future."