Italy's Nexi clinches all-share merger with Nordic rival Nets

By Elisa Anzolin MILAN (Reuters) - Italy's Nexi has struck its second tie-up in six weeks, agreeing a 7.8 billion euro ($9.2 billion) merger with Nordic rival Nets to create Europe's largest payments group. Consolidation is sweeping through the fast-expanding payments industry and the all-share deal announced late on Sunday follows Nexi's long-awaited accord to buy domestic rival SIA for 4.6 billion euros in shares. Nexi said the two transactions would create a group with pro-forma 2020 revenue of 2.9 billion euros and core profit of 1.5 billion euros, the largest at a European payments business.

Reuters November 17, 2020 01:06:10 IST
Italy's Nexi clinches all-share merger with Nordic rival Nets

Italys Nexi clinches allshare merger with Nordic rival Nets

By Elisa Anzolin

MILAN (Reuters) - Italy's Nexi has struck its second tie-up in six weeks, agreeing a 7.8 billion euro ($9.2 billion) merger with Nordic rival Nets to create Europe's largest payments group.

Consolidation is sweeping through the fast-expanding payments industry and the all-share deal announced late on Sunday follows Nexi's long-awaited accord to buy domestic rival SIA for 4.6 billion euros in shares.

Nexi said the two transactions would create a group with pro-forma 2020 revenue of 2.9 billion euros and core profit of 1.5 billion euros, the largest at a European payments business. Nexi-Nets-SIA would also surpass rival heavyweight Worldline-Ingenico for the number of payment cards managed and retail outlets served.

Annual integration benefits are estimated at 320 million euros, the companies said in a joint statement.

"We are creating a stronger Nexi ... and a more resilient Nexi," CEO Paolo Bertoluzzo told analysts on Monday, citing market and client diversification, scale and e-commerce exposure as key advantages.

Bertoluzzo will head the enlarged Milan-listed group.

Private equity-backed Nets is a leader in digitally advanced northern European payments markets while also present in expanding eastern European markets.

Bertoluzzo said that high-growth areas such as Germany and Poland remain a focus for further potential deals as well as banks' payment assets and their portfolios of merchant clients.

Nets shareholders will receive new Nexi shares subject to a staggered lockup of between six and 24 months. Nets shareholders could also receive up to 250 million euros of additional shares depending on Nets' 2021 core profit.

"The earn-out structure and short initial lock-up does shift the risk back to Nexi shareholders," Jefferies said in note

With a 17% stake, Italian state lender CDP, currently SIA's controlling shareholder, will be the single largest investor in the new group. Private equity firms will hold a total of 36%.

Nexi expects to close the Nets deal in the second quarter of 2021 and the SIA transaction in the third quarter. Both need antitrust approval but Bertoluzzo said the groups had no major overlaps.

Jefferies said an extended timeframe to integrate Nets helped to reduce execution risks for that was "shaping up to be one of the more complex deals undertaken in European payments".

Nexi jumped at the opportunity when U.S. group Global Payments pulled out of the race for Nets, wary of making an overseas acquisition during the coronavirus second wave, a source said, while Worldline was busy buying Ingenico.

"We had the opportunity to make the Nets deal happen now and not later and so we decided to go for it," Bertoluzzo said.

Nexi shares were up 0.3% by 1612 GMT.

(Reporting by Elisa Anzolin; Editing by Valentina Za and David Goodman)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

The forces fighting in Ethiopia's Tigray conflict
World

The forces fighting in Ethiopia's Tigray conflict

ADDIS ABABA/NAIROBI (Reuters) - Ethiopia's military is fighting battle-hardened troops in the northern Tigray region, threatening stability around the Horn of Africa. Here are some facts on the forces: THE NATIONAL MILITARY: THE ENDF The Ethiopian National Defence Force (ENDF) has around 140,000 active personnel, the vast majority of them in the army, according to the Janes security data group. Its troops have been tested by Islamist militants in Somalia and rebel groups in Ethiopia's border regions, as well as a two-year border war with Eritrea followed by an 18-year standoff that only ended in 2018.

Turkey to impose measures to combat coronavirus, Erdogan says
World

Turkey to impose measures to combat coronavirus, Erdogan says

ISTANBUL (Reuters) - Turkey's President Tayyip Erdogan said on Tuesday that the government will impose tighter measures to fight with the coronavirus and impose partial lockdowns on weekends across the country. Speaking after the cabinet meeting, Erdogan also said all schools will remain closed until the year-end and all restaurants will only work by delivery

Brazil to track illegal Amazon wood exports using isotopes, president says
World

Brazil to track illegal Amazon wood exports using isotopes, president says

BRASILIA (Reuters) - Brazilian President Jair Bolsonaro said on Tuesday his government in coming days will name countries that are importing wood illegally extracted from the Amazon. Addressing a BRICS summit of big developing economies, Bolsonaro said Brazilian police had developed a way of tracking wood exported from the Amazon using isotopes.