Worldline to acquire Ingenico to create the world’s fourth-largest payment processor

As per the recent news, two of the biggest players in the European payments space have announced an imminent merger that is expected to establish the world’s fourth-largest entity of the respective industry.

As of Monday, France’s Worldline has declared its plans of purchasing its domestic competitor, Ingenico. As per the specifics of the deal revealed so far, the two companies have agreed on a 19% cash and 81% stock deal. Worldline commented on Monday that the deal values Ingenico at $8.6 billion that roughly translates to a 17% premium on the closing price of the company on Friday.

Merged Company To Save €250 Million In Costs In The Next Four Years

Following the merger, Worldline added, net revenue for the joint company can be expected at €5.3 million euros while operating margins are expected to touch €1.2 billion. With these figures in mind, Worldline estimated the new company to be the fourth-largest payments company across the globe. In the four years after the acquisition, the joint company is likely to save €250 million in costs.

As per the sources, shareholders of Ingenico will receive €160.5 in cash and 11 shares of Worldline for every 7 shares of Ingenico that they currently hold. The secondary offer at a later stage will also see Ingenico investors receiving 56 shares of Worldline for 29 shares of Ingenico. The secondary offer, as per the analysts, will roughly value each Ingenico share at €123.10 that matches the stock price at the end of the last week.

Monday’s announcement also declared Gilles Grapinet, the current CEO of Worldline to take over the same role at the combined company while Bernard Bourigeaud, Ingenico’s Chairman will be brought on board as the non-executive chairman.

Deal To Be Finalized In 2020’s Third Quarter

According to Grapinet, the deal is likely to be finalized in 2020’s third quarter. He expressed confidence in the joint company winning the reputation of the world-class leader in the European sector of digital payments.

Following the announcement, Worldline was seen trading 3% lower on Monday. Ingenico, on the other hand, printed a gain of 11% for the day. Ingenico’s performance in 2019 was largely upbeat. The stock opened at around €47.0 in January 2019 and closed the year with more than 100% gain at €98 per share. Worldline was optimistic in the stock market in 2019 as well. The firm recorded an annual gain of around 60% last year.