Bank of America to buy National Processing for $1.4bn

Bank of America to buy National Processing for $1.4bn

Bank of America has signed a definitive agreement to buy all the outstanding shares of National Processing Incorporated, the US-based provider of merchant credit and debit card processing, for $1.4bn in cash.

National Processing, which is 83% owned by National City Corporation, said last month it was considering a possible sale of the company. National Processing currently supports approximately 700,000 merchant locations, representing nearly one out of every six Visa and MasterCard transactions processed in the US.

Bank of America says the price is equal to $26.60 per share, considerably less than National Processing's Monday closing price $29.40.

The bank will combine National Processing with its Merchant Services business to create the second largest merchant acquirer in the US, with nearly $250 billion in annual processing volume. The newly combined business will be headquartered in Louisville, Kentucky, where National Processing is based.

G. Patrick Phillips, president, card services and e-commerce, Bank of America, says: "This acquisition will better position the combined units to deliver a broader suite of payment solutions as transactions migrate from cash and checks to electronic payments."

Mark Pyke, currently the chief operating officer of National Processing will head the combined merchant services business once the transaction is complete. Pyke will report directly to Phillips.

The merger is expected to close in the fourth quarter, subject to shareholder and regulatory approval.

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