What To Know About Fiserv's Acquisition Of First Data

Financial services technology Fiserv, Inc. FISV reached an agreement to acquire First Data Corp FDC, a leader in commerce-enabling technology, for $22 billion.

What Happened

Fiserv's all-stock acquisition will see First Data shareholders receiving 0.303 shares of Fiserv for each First Data share held. The fixed exchange ratio implies an equity value of $22 billion and represents a 29 percent premium to the five-day volume weight average price. The transaction will see Fiserv shareholders controlling 57.5 percent of the combined entity.

Why It's Important

The combination of Fiserv and First Data will create one of the largest payments and financial technology providers in the world, the companies said in the press release. The highly complementary combination will offer clients a range of services, including card issuer processing and network services and a cloud-based point of sale solution.

"We expect to redefine the manner in which people and institutions move money and information," said Jeffery Yabuki, President and CEO of Fiserv.

What's Next

The merger is expected to be accretive to Fiserv's earnings by more than 20 percent in the first full year fafter closing. Over a five-year period, the merger is expected to generate at least $500 million of revenue synergies and generate around $900 million of run-rate cost synergy savings over the same time period.

The transaction is expected to close during the bottom half of 2019 and remains subject to customary closing conditions and regulatory approvals.

First Data shares traded higher by nearly 20 percent, while Fiserv shares fell about 5.3 percent.

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Photo courtesy of First Data.