Nexi, the Italian digital payment company, agreed Sunday (Oct. 4) to buy its FinTech competitor, SIA, for about 4.6 billion euros ($5.4 billion) in a stock deal to create one of Europe’s biggest payment providers, The Wall Street Journal (WSJ) reported.
The transaction will create a company with a combined market capitalization of around 15 billion euros ($17.6 billion) and ends a month of negotiations.
Under the terms of the deal, Nexi’s shareholders will own 70 percent of the combined new company while SIA investors will hold the remaining 30 percent, the WSJ reported.
“The combination with SIA should create significant value for shareholders,” analysts at Kepler Cheuvreux, the Paris-based financial services research company, wrote in a note to investors on Monday, Bloomberg News reported. “The deal looks fairly strategic and the deal should finally bring more synergies than initially expected.”
This is not the first mega deal involving FinTech companies.
Earlier this year, Wordline SA, the French payment company, paid 7.8 billion euros ($9.1 billion) to acquire Ingenico Group, the Paris-based technology provider of secure electronic transactions to create a FinTech dynamo. In January, Visa Inc. agreed to pay $5.3 billion for Plaid Inc., the San Francisco-based financial services company.
Last week, Nexi signed a partnership with Ebury, the London FinTech that provides global transaction banking services to businesses. Under the agreement, Nexi's partner banks will be able to offer their clients the full suite of Ebury services, including international cash management, FX risk management and import/export lending.
“The collaboration with Ebury allows us to support Italian banks that want to expand their global transaction services to SME and Corporate clients, who are increasingly looking to compete cross-border,” said Renato Martini, Nexi’s head of digital banking solutions, in a statement. “Our bank partners will be able to offer relevant services for Italian SMEs that are importing and exporting and strengthen the relationship with their clients by seamlessly integrating Ebury’s services into their digital offering for businesses.”
Also last week, PYMNTS reported that in addition to the Ebury & Nexi deal, more banks are seeking to streamline access to finance or make it easier to safely share financial information with apps.