According to a report in The Financial Times, Mastercard will take part in Network International's initial public offering (IPO) in London in April by making a $300 million investment in the listing. It will amount to Mastercard purchasing 9.99 percent of Network International's shares, reported The Financial Times. Under the deal, Mastercard and Network International will also create a strategic partnership to drive adoption of digital payments in the Middle East and Africa. Network International has emerged as a leader in the Middle East in helping retailers accept cards as a payment method both in the physical world and online. The payment sector in the Middle East has been seeing brisk business in recent years as more people use digital payments to make purchases.
Once the deal is complete, Mastercard will be the fourth biggest shareholder of Network International behind General Atlantic, Warburg Pincus, and Emirates NBD, reported the FT. In an interview with the paper Network International chairman Ron Kalifa said the investment signifies confidence in the company ahead of its IPO. “Network International sits at the heart of the Middle East and Africa’s payments ecosystem, the world’s most under-penetrated payments market, providing investors with the unique opportunity to benefit from the rapid structural shift from cash to digital payments,” he said in the report.
The planned $300 million investment in Network International comes within the same month that FIS and Worldpay announced a $43 billion deal. That merger and the investment on the part of Mastercard into Network International showcases the consolidation happening in the payments industry. With traditional payment companies feeling pressure from FinTechs, and with growth in digital payments increasing, companies are looking to mergers and acquisitions to keep up with the changes.