CMA launches probe into Global Payments acquisition of Worldpay

(Sharecast News) - The Competition and Markets Authority launched a formal investigation into Global Payments' planned $24.25bn acquisition of Worldpay on Tuesday, escalating its scrutiny of a deal that would combine two major players in global payments processing. In its commencement notice, the UK competition regulator said the merger notice submitted by Global Payments and Worldpay met the requirements of the Enterprise Act 2002, triggering the statutory timetable for its review.

The phase one investigation would formally kick off on 17 September, with the CMA required to decide by 11 November whether to clear the transaction or refer it for a more in-depth phase two probe.

The launch marked a step up from July, when the CMA issued only a preliminary invitation to comment while assessing whether the merger might create a relevant merger situation and potentially lead to a substantial lessening of competition in UK markets.

The watchdog would now gather evidence to evaluate the potential competitive impact of the tie-up.

Atlanta-based Global Payments agreed in April to acquire Worldpay from Fidelity National Information Services and private equity firm GTCR in a deal valued at $22.7bn net of a related divestment, and $24.25bn in total.

As part of the transaction, Global Payments also struck a $13.5bn deal to sell its Issuer Solutions business to FIS.

If approved, the combination would merge Worldpay's online and enterprise payments specialty with Global Payments' focus on small and mid-sized businesses, creating a company handling payments for more than six million clients and processing about 94 billion transactions annually across over 175 countries.

According to company statements, the merged entity would generate around $12.5bn in adjusted net revenue and $6.5bn in adjusted core earnings.

Reporting by Josh White for Sharecast.com.