.svg)
The UK’s Competition and Markets Authority (CMA) is to investigate Global Payments’ anticipated acquisition of Worldpay, potentially signalling a deeper investigation ahead of a mid-July deadline.
The CMA on July 3 that it was inviting comments on the investigation, which is the first stage of its information-gathering process, until July 16. However, a formal investigation itself has not yet been launched, it added.
It is considering whether the mooted sale would result in a relevant merger situation under the merger provisions of the Enterprise Act 2002 and if it would result in a reduction in competition in the UK.
Relevant merger situation
A relevant merger situation is created if two or more enterprises have ceased to be distinct at a time or if the turnover test is met, i.e., the value of the turnover in the UK of the enterprise being taken over exceeds £70m; or if the merged entity will supply or purchase 25 percent or more of goods or services of a particular description in the UK.
Global Payments, a US multinational fintech company, agreed to pay $22.7bn for Worldpay in April.
, if the acquisition goes ahead, the new company will have more than 6m customers, enable approximately 94bn transactions and have $3.7trn in volume across more than 175 countries.
When the proposed acquisition was announced in April, Cameron Bready, chief executive of Global Payments, said the acquisition was a pivotal milestone for the company.
“Global Payments and Worldpay bring together highly complementary capabilities and distribution networks, creating significant opportunities for the combined business to accelerate growth, amplify investment in innovation and elevate client and partners experiences with best-in-class solutions,” he said.
Dependent on clearance
Global Payment’s acquisition of Worldpay is dependent on regulatory clearance in a number of jurisdictions, perhaps most significantly in the United States.
If the CMA receives many objections to the proposed acquisition from industry stakeholders, this could prompt it to deepen its investigation, which could in turn then lead to the deal being renegotiated.
The consultation and any subsequent investigation will be closely watched by regulators in the EU and US.
In April, as covered by 91ԭ, US regulators approved a merger between credit card and financial services companies Capital One and Discover. Politicians had reservations about the merger and regulatory approval had seemed in the balance, but the merger was ultimately passed.
In 2023, as covered by 91ԭ, FIS sold a 45 percent stake in its Worldpay Merchant Solutions business to private equity funds managed by GTCR, a US firm.
The transaction valued Worldpay at $18.5bn, including $1bn of consideration contingent on the returns realised by GTCR exceeding certain thresholds. Worldpay had previously been acquired by FIS in 2019 for $43bn.
