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SIX Payments prepares to join M&A deal frenzy

22 September 2017  |  5454 views  |  0 cash

SIX Group has reportedly hired JPMorgan to run the rule over its payments services unit as it looks to capitalise on the M&A deal frenzy in the payments processing market.

The Swiss market operator, which banked earnings of Sfr145 million from its payments business last year, has asked JPMorgan to review its options, including a potential $2.1 billion sale, according to unidentified sources cited by Reuters.

The newswire says there are a number of other options on the table, including a stock market listing, and the sale of a minority stake.

The move comes amid a surge of interest in the money-generating potential of Europe's largest payment processing units. Like other domestic market operators, SIX is responding to ongoing disruption in the payments business as new competitors move in and consumers switch in their droves to online and mobile payments.

Recent big ticket deals in the sector include MsterCard's buy out of VocaLink last year, the EUR700 million takeover of Germany's Concardis by Bain and Advent International in January, and Vantiv's acquisition of UK-based Worldpay for $10.35bn that was finalised in August. Nordic payments processor Nets is also rumoured to be close to a private equity buy-out that would value the company at more than $5bn.

This summers, Portuguese banks have hired Deutsche Bank to review options for their payments firm Sibs, while Germany’s savings banks are looking for a buyer of a minority stake in their BS Payone unit, sources familiar with the matter told Reuters.

Austrian banks have asked HSBC to kick off a sales process for their payments business Card Complete, the sources said.

Switzerland's SIX is currently overseeing the countdown to a mass-market switch to the ISO 20022 standard for payments harmonisation across all consumer, corporate and bank payments, an initiative billed as the country's biggest financial infrastructure project in 390 years. The project marks a response to an inexorable rise in electronic payments, currently accounting for 74% of all consumer transactions.

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