Worldpay To Merge With US Rival Vantiv In £9.3bn Deal

Payment processing form Worldpay is to merge with US rival Vantiv in a (£9.3bn) deal.

WorldPay is considered a British success story, employing 5,000 people and serving a variety of organisations around the world, but will soon become the latest in a line of UK companies to be acquired by foreign buyers.

An initial merger deal was reached last month and will see Vantiv shareholders owning a majority (57 percent) of the combined group, while Worldpay investors will hold the other 43 percent.

“On 9 August 2017, the boards of directors of Worldpay Group plc (the Company) and Vantiv, Inc.(Vantiv) announced that they had reached agreement on the terms of a recommended acquisition by Vantiv UK Limited, a subsidiary of Vantiv, of the entire issued and to be issued ordinary share capital of the Company,” said Worldpay in a statement.

WorldPay spun out of RBS several years ago, having been a unit of Natwest before that, and provides payment services for over 400,000 retailers in 136 countries and is the UK’s leading payment processor. It is said to handle over 30 million transactions each day.

It floated on the London Stock Exchange for £4.8bn back in 2015 having  flirted with a sale, most notably a £6.6 billion merger with French rival Ingenico Group.

However, the Vantiv deal will see the combined company dealing with $1.5 trillion in payment volume and 40 billion transactions through more than 300 payment methods in 146 countries and 126 currencies. The new organisation will have a combined net revenue of over $3.2bn.

The deal with Vantiv will essentially expand the US firm’s operations beyond American shores, thanks to WorldPay’s global reach. However the organisations pointed out that their markets are rapidly evolving, and the deal will give them the scale to adjust to changing trends.

Evolving Market

“The payments landscape is evolving rapidly,” they said in a statement. “Merchants and consumers are continuously looking for new and innovative solutions to enable commerce as payments move into the digital world.

“The Combined Company will be a leading global omni-commerce payments provider and its enhanced capabilities  will position it to better and more quickly address those merchants’ evolving needs and to realise improved commercial outcomes for its clients.”

There was no word on possible redundancies, although this is highly likely as the combined company will have annual recurring pre-tax cost synergies of approximately $200m, and there is expected to be a “one-off restructuring and integration costs of approximately $330m.”

The combined company will be named Worldpay, but will be headquartered in Cincinnati (Ohio). London meanwhile will become its international headquarters.

WorldPay is the latest British firm to disappear into foreign ownership. Last year British chip designer ARM was sold to Japanese giant Softbank for £24bn. And a couple of months ago British chip designer Imagination Technologies raised the ‘for sale’ above its doors after its chip licensing row with Apple threatened its survival.

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