LONDON: US card payment processing giant Vantiv has agreed to buy British peer Worldpay for £9.3 billion ($12.1 billion), the pair said Wednesday.
The vast deal creates a leading international e-commerce payments provider that processes $1.5 trillion in payments and 40 billion transactions per year in 146 countries and 126 currencies, they said in a statement.
The new group — which will be called Worldpay — will have a combined stock market value of approximately £22.2 billion.
“The boards of directors of Vantiv and Worldpay are pleased to announce that they have reached agreement on the terms of a recommended merger of Worldpay with Vantiv … in the form of a recommended offer,” they said in a statement to the London Stock Exchange.
The announcement, which followed an initial agreement last month, was billed as a merger but will see Vantiv shareholders take a 57-percent stake of the combined group. Worldpay investors will hold 43 percent.
The new company will have its global and corporate headquarters in Cincinnati, Ohio, while London will be its international base.
Vantiv will pay 397 pence per share for Worldpay, or £8 billion, plus another £1.3 billion to cover debts.
“This is a powerful combination that is strategically compelling for both companies,” added Charles Drucker, Vantiv president and chief executive.
“It joins two highly complementary businesses, and will allow us to achieve even more together than either organization could accomplish on its own.
“Our combined company will have unparallelled scale, a comprehensive suite of solutions, and the worldwide reach to make us the payments industry global partner of choice.”
The deal is set complete in early 2018, subject to regulatory and shareholder approvals.
Thd combined company will incur $330 million in one-off restructuring and integration costs, but anticipates annual efficiency savings of $200 million three years after completion.
Worldpay chief executive Philip Jansen added that the deal would offer “substantial opportunities to capitalize on the rapid evolution of payments.”
The deal will “offer more payment solutions to businesses, whether large or small, global or local, enabling them to meet consumers’ increasing demands,” he added.
Drucker will be executive chairman and co-chief executive of the new group, with Jansen as co-chief executive.
The combined company will have a secondary listing on the London stock market, but will have its primary listing in New York.
Worldpay was formerly owned by Britain’s state-rescued Royal Bank of Scotland, which sold off its remaining stake to private equity firms Advent International and Bain Capital in 2013.
The British group — which processes millions of payments a day in stores, online and on mobile phones — was floated on the London stock market in 2015.
At the start of July, Worldpay had initially revealed takeover approaches from both Vantiv and banking giant JPMorgan Chase. However, the latter then indicated it would not pursue a transaction.
Vantiv is mainly focused on the United States market and handled 25 billion transactions last year.