Worldline is to acquire French peer Ingenico for EUR7.8 billion, creating a European payments powerhouse and the fourth-largest player in payment services worldwide.
The deal marks the ongoing consolidation in the payment sector, merging Worldline's prowess in digital payments with Ingenico's traditional strengths in merchant terminal and acquiring services.
With approximately 20,000 employees in 50 countries, the combined group would offer payment services to nearly one million merchants and 1,200 financial institutions. Together, the two companies have projected 2019 net revenues of EUR5.3 billion and operating margins of EUR1.2 billion.
The transaction will give the combined companies exceptional reach in Continental Europe, merging Ingenico's strong standing in Germany, the Nordics and France, with Worldline's leadership positions in Benelux, Switzerland and Austria, and provide expanded geographical coverage with access to markets in the US, Latin America and Asia-Pacific.
Worldline's tender for Ingenico consist of an 81% share and 19% cash transaction, with around EUR250 million euros expected in savings by 2024.
The offer implies a premium of about 16% to Ingenico’s current market capitalisation of around EUR6.7 billion.
Ingenico has been hot property for a while as it was previously in talks with Natixis, Edenred and WorldPay. However, not all market commentators are convinced of the merits of Worldline's bid, with analysts at Quest recommending that “investors should, if they can, either opt for cash, sell their shares, push for a higher price or seek another suitor. It seems that this French solution is a poor deal for equity shareholders of both Ingenico and Worldline.”