Fiserv has acquired and merged with First Data Corporation to create a payments and financial technology provider.
As part of the acquisition, First Data shareholders will receive an exchange ratio of 0.303 Fiserv shares for each share they hold. In total, the stock deal is being valued at $22bn.
Once the transaction is completed, which is expected to be in the second half of 2019, Fiserv shareholders will own 57.5 per cent of the combined company, while First Data shareholders will have the remaining 42.5 per cent.
By joining together, the company will offer a range of financial technology solutions including payments, digital banking, account processing, e-commerce, POS, and card issuing, among others. The two companies are joining their merchant and cash management capabilities to provide SMEs with integrated account enrolment capabilities and digital banking services.
First Data also offers a selection of fraud and risk management tools which can be integrated with core processing and operations. The platform offers authentication tools, credit risk management, fraud prevention and detection, fraud resolution and recovery.
This deal is expected to provide $500m in revenue synergies over a five-year period.
Fiserv president and CEO Jeffery Yabuki said, “Through this transformative combination, we expect to redefine the manner in which people and institutions move money and information. 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 new company will be led by a board of 10 members, with six from Fiserv and four from First Data. Fiserv president and CEO Jeffery Yabuki will act as the CEO of the new company and chairman of the board.
Current chairman and CEO of First Data Frank Bisignano will serve as the president and COO of the combined enterprise.
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