Worldline SA (Worldline), a France-based financial technology company, entered an acquisition deal of a 7.8 billion-euro ($8.6 billion) to buy its rival Ingenico Group SA (Ingenico) on Monday, February 3, 2020. With the acquisition of the French technology company, Worldline would create one of the world’s largest payment services providers with a leading payment platform in Europe.
Worldline’s Acquisition of Ingenico
Worldline, which is formerly known as Atos Worldline SAS, would be the fourth biggest payment company in the world after the acquisition of Ingenico. Atos, a French information technology company that owns a large stake in Worldline welcomed the deal and expected that the deal would consolidate its digital financial operations.
Atos officials added that Atos could reduce its shares in Worldline and said that Ingenico has been a long target of the former company. Sources told Reuters that Edenred (EDEN.PA) and Natixis (CNAT.PA) had also shown interest in the participation of the takeover bid for Ingenico.
According to Reuters report, “the takeover deal would give Ingenico an implied equity value of 7.8 billion euros ($8.7 billion) and would be immediately accretive to earnings per share, with around 250 million euros expected in savings by 2024.” The takeover deal would be finalized during the third quarter of 2020 after having taken the regulatory approval. Upon closing the deal, the former Worldline would own 65% shares of the combined entity and Ingenico would own the rest 35% shares.
The Chairman and CEO of Worldline, Gilles Grapinet would become the CEO of the combined company and Ingenico’s Chairman, Bernard Bourigeaud would become a non-executive chairman. Morgan Stanley and Cardinal Partners represented the financial advisors to Worldline while Goldman Sachs Paris and Rothschild advised Ingenico for forging the deal between the two French financial technology companies.
Leading Digital Payment Industry
With the rapid increase in the use of digital financial services and customers’ access to a smartphone for online payment, the financial platform providers around the globe have involved either mergers or acquisitions to cut their expenditures effectively and stay alive in the competition.
According to research by consulting firm McKinsey, the global financial technology sector emerged one of the promising industries in the world and the global payment industry would reach $3 trillion a year in revenue by 2023 as customers were fond of shopping online and shifted from cash transaction to digital payments as the mode of their payments.
As per the analysts at Bryan Garnier & Co., the deal was a “very positive” step for Worldline that would grasp an opportunity to be part of European leadership and to increase its market share in the digital financial industry. The analysts further added that the combined company has a more “diversified profile than its US peers.”
According to Bloomberg, “The takeover – the biggest of the year so far in Europe – continues last year’s spate of payments company mergers, which included a series of major deals from Fiserv Inc., Fidelity National Information Services Inc., and Global Payments Inc.” Under the deal on Monday, Bloomberg explained that Ingenico shareholders would be receiving 123.10 euros a share in cash or a mixture of cash and shares which was 17% higher than its stock’s last closing price.
Following the announcement of the deal, Ingenico gained as much as 14% in Paris on Monday which led to the rising share price to 119.9 euros, the highest surge of share since last year while Worldline fell as much as 8.6% share price.
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