Fintech firm Fiserv has agreed to acquire payment processor First Data in an all-stock deal worth $22bn.
The merger will create an end-to-end payments platform from issuance to acceptance.
Together, the companies will support various payments and financial services through their technology capabilities. Furthermore, they include account processing, digital banking tools, card issuer processing and network services, e-commerce, integrated payments, and the Clover POS platform.
Fiserv acquisition of First Data
As per the agreed terms of the transaction, shareholders of First Data will also be entitled to receive a fixed exchange ratio of 0.303 Fiserv shares for each share held.
Fiserv shareholders will own 57.5% of the merged entity, which will trade as Fiserv. The remaining stake is owned by First Data shareholders.
The combination will offer around $900m of cost savings and at least $500m of revenue synergies.
Fiserv president and CEO Jeffery Yabuki said: “We admire First Data for its excellence in merchant acquiring and global issuing services, and the tremendous progress they have made under Frank’s leadership.
“We expect this combination to catalyse and support an enhanced value proposition for our collective clients and their customers.”
The deal already secured the green light from the companies’ boards and is pending shareholder and regulatory approvals. It will wrap up in the second half of this year.
Yabuki will lead the merged entity as CEO and chairman, while First Data chairman and CEO will become president and COO.
The combined group’s board will also have six representatives from Fiserv and four from First Data.