The planned takeover of Ingenico by Worldline, if approved by regulators, would create the fourth-biggest payments company in the world and a new European champion in the sector.
Payments company Worldline has agreed to buy French peer Ingenico at €7.8bn, offering a premium of about 16% to Ingenico’s current market capitalisation of around €6.7bn.
The takeover deal would mean an implied equity value of €7.8bn for Ingenico. It would immediately increase the acquired company’s earnings per share. Ingenico can expect about €250m in savings by 2024, the companies said.
In a primary tender offer, Ingenico shareholders would receive 11 Worldline shares and €160.5 in cash for seven Ingenico shares.
There would also be a secondary exchange offer, with 56 Worldline shares exchanged for 29 Ingenico shares. This represents an offer price of €123.10 per Ingenico share.
The companies expect to close the transaction by the third quarter of 2020. At that time, former Worldline shareholders would own 65% of the combined entity and former Ingenico shareholders would own 35%.
Worldline Chairman and CEO Gilles Grapinet would become CEO of the combined company and Ingenico Chairman Bernard Bourigeaud would become non-executive chairman.
Unprecedented wave of consolidations
The takeover of Ingenico by Worldline, in which French company Atos has a large stake, is the latest example of consolidation in the payments sector.
With the rise of the digital, new entrants have continued to disrupt a fragmented payments industry. In response, many companies have embraced consolidation as a means of fostering growth and protecting market share.
The global payments sector is set to reach $3 trillion a year in revenue by 2023, according to research by consulting firm McKinsey.
In 2019, Fidelity National Information Services (FIS) bought Worldpay for about $35bn, while Fiserv bought First Data Corp for $22bn.
The increasing use of smartphones for online payments has led to more competition, with mergers and acquisitions allowing companies to cut costs.