Investors have seen a number of big mega-mergers, acquisitions, as well as initial public offerings (IPOs) this year, despite everything that’s happened so far in 2020. However, that’s not to say that every single deal has gone through. One of the biggest planned mergers in the payment industry, between Global Payments (NYSE: GPN) and Fidelity National Information Services (NYSE: FIS) – or just FIS – seems to have fallen apart.
The deal, which was originally rumored to be worth around $70 billion in total, ended up failing to go through, according to a weekend report from the Wall Street Journal. Both companies are involved in the realm of merchant payment processing and banking services. According to sources familiar with the subject, both companies were in advanced talks that were close to moving ahead. As it turned out, however, talks broke down in the past few days. It’s uncertain as to what exactly caused the deal to fall apart.
If it had gone through, this particular deal would have been the largest acquisition seen in 2020. While there’s still some hope that deal talks could resume next year, it’s unlikely anything will happen in the short-term. At the same time, it’s far from certain whether or not the deal would have passed through regulators also, especially since all these previous acquisitions could lead to too much market control resting on a single corporate name.
The payment/point-of-sale industry has been seeing a major consolidation period over the past year or two. Back in 2019, Fiserv paid $22 billion to buy out First Data. Later on, FIS bought out Worldpay for around $35 billion. Shortly after that, Global Payments announced a $22 billion deal for Total Systems Services.
Despite this, however, there’s still a growing number of newer competitors that could be a threat to FIS or Global Payments in the future. This includes companies like Stripe, a company with a $100 billion valuation but is still opting to stay private at the moment. A few other notable rivals include Adyen NV as well as Square, although both names are a little less well known than Stripe is at the moment.
Shares of both FIS and Global Payments are inching down slightly right now in pre-market trading. It wouldn’t be surprising if both stocks ended up dipping a few percentage points as well. Despite this, analysts covering both of these companies remain quite optimistic about their futures. For FIS, around 27 analysts have a buy rating, while just 8 have a neutral hold, with only 1 sell. In regards to Global Payments, it’s a similar story. Around 26 analysts are bullish, while six are just neutral at the moment.
Global Payments Company Profile
Global Payments is a leading provider of payment processing and software solutions and focuses on serving small and midsize merchants. The company operates in 30 countries and generates about one fourth of its revenue from outside North America, primarily in Europe and Asia. Global Payments recently announced its intention to merge with Total System Services in an all-stock deal that will give Total System Services shareholders 48% of the combined company’s shares. – Warrior Trading News
