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July 5, 2017

Vantiv pays $10bn for UK payments firm Worldpay

Will we soon see another big move such as this as other major organisations looks to move into the payments industry?

By Tom Ball

Britain’s largest payment processor, Worldpay, has been taken over by U.S. credit card firm Vantiv for $10 billion.

The takeover will see the formation of a new company that is set to be led by Charles Drucker, the Vantiv CEO, and the CEO of Worldpay, Philip Jansen. Around 41 percent of the new company will be owned by Worldpay shareholders.

Not only will there be two CEOs, but the new firm will also have two hedquarters – one in the United States, and the other in London. Four directors from Worldpay and seven from Vantiv will form the company’s board.

As rumours of a possible takeover broke, JPMorgan and Vantiv emerged as the front runners in a possible deal. The confirmation of Worldpay having been approached by possible buyers pushed the payments firm’s share price up a huge 28% yesterday.

The share price, however, quickly dropped after the deal had been struck, with investors left disappointed at the lack of a bidding war between JPMorgan and Vantiv.

The growing interest in payment processing companies from banks and technology firms has arisen in sync with the fall in cash transactions.

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Vantiv have claimed a significant section of this market by acquiring Worldpay, it has been rumoured that the likes of Visa and Mastercard may also be looking to carry out a similar move as Danish firm Nets A/S announced that it had been approached. It was not confirmed who had shown interest in the company.

Worldpay has only been listed on the London Stock Exchange since 2015, at which point it was valued at close to $5 billion, making it the largest public offering since the Royal Mail was floated in 2013.

The company deals with 40% of all transactions made in the UK, putting it ahead of any other individual provider, and the company also has over 5,000 staff based at its headquarters in London.

 

 

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