Fiserv signs $22bn deal for First Data acquisition

Fiserv has inked a mega all-stock deal of $22 billion to buy First Data to create a payments and fintech behemoth. Under the agreement, First Data shareholders will receive a fixed exchange ratio of 0.303 Fiserv shares for each share of First Data common stock they own. The transaction is expected to close in the second half of the year, subject to shareholder and regulatory approval.
 

Fiserv shareholders will own 57.5% of the combined company and First Data shareholders 42.5%. Followed by this mega deal announcement, the shares of First Data started soaring more than 20% in pre-market trading, while Fiserv saw a six per cent dip. With this deal signed by the two majors players in the fintech industry, the combination entity will offer a range of payments and financial services, including account processing and digital banking solutions, card issuer processing and network services, e-commerce, integrated payments and the Clover cloud-based point-of-sale system.

The merger is expected to bring various other financial benefits like generating at least $500 million of revenue over a five year period. Meanwhile, about $900 million in run-rate cost synergy savings over five years is also predicted. Combined earnings per share are expected to rise by more than 20% in the first year.

Jeffery Yabuki , Chief of Fiserv will serve as CEO and chairman of the combined entity, and the First Data boss Frank Bisignano will become the president and COO.

"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 catalyze and support an enhanced value proposition for our collective clients and their customers," Yabuki says.