Vantiv, a US-based credit card processor, has made a £7.7bn ($10bn) offer to acquire the UK-based payment processor Worldpay as part of its strategy to gain greater exposure to e-commerce retailers and small businesses.
In a stock exchange filing, Worldpay Group said that the agreement has been reached in principle and final announcement for a potential merger is expected to be made by 1 August, following completion of due diligence process by both parties. Worldpay further said that there can be no certainty that any transaction will occur.
Worldpay offers payment processing for mobile, online and in-store transactions in 146 countries. It is one of the largest payment processors in Britain, where it accounts for approximately 42% of all retail transactions.
As per the preliminary offer, for each share of Worldpay, its shareholders will receive £0.55 in cash, 0.0672 of a new Vantiv share and a 5 pence cash dividend per Worldpay share, totalling £3.85 per Worldpay share.
Worldpay said that the potential merger of both companies will create a world class payments group in a dynamic market, with deep payments capabilities, product and vertical expertise and strong distribution channels to serve merchants around the world in the global ecommerce market, and in-store and online in the UK and US markets.
The combined group will serve a wide range of customers, with a strong position in the four core regions of the US, Europe, Asia-Pacific and South America, including many of the largest ecommerce merchants worldwide, and a substantial base of merchants of all sizes in Europe and the US.
Earlier, Worldpay announced that it had received takeover proposals from both Vantiv and JPMorgan Chase; however, once Worldpay disclosed Vantiv offer on 5 July, JPMorgan said that it will not make a counteroffer.