Industry Giants First Data and Fiserv to Combine in $22 Billion Deal

Fiserv and First Data announced on Wednesday that they are planning to merge in an all-stock transaction. Fiserv will acquire First Data for $22 billion.

The two companies’ boards have approved the deal, the companies said. Following the deal’s closure, Fiserv shareholders will own 57.5% of the combined company and First Data shareholders will own 42.5%. The combined company will be known as Fiserv.

First Data has expanded its acquiring solutions to include more direct offerings for payment facilitators and ISVs over the past couple of years. In 2017, it launched a business unit specifically to work with partners such as payment facilitators, ISVs, value-added resellers and software developers. It also introduced an e-commerce solution for payment facilitators and acquired BluePay, strengthening its presence in the ISV market, later that year.

While the impact of the merger on PFs remains to be seen, the companies touted integrated payments capabilities and expertise in partnering with software developers as being among the offerings of the combined company in Wednesday’s announcement.

According to the announcement, the companies expect to invest $500 million over five years to develop new and enhanced solutions for their combined client base. They plan to combine their offerings to better serve clients across both the issuing and acquiring ecosystems. For example, they could integrate First Data’s merchant account enrollment capabilities into Fiserv’s digital banking solutions, they said.

Once the transaction closes, Fiserv president and CEO Jeffery Yabuki will serve as the combined company’s CEO and chairman of the board of directors. First Data CEO Frank Bisignano will serve as president and chief operating officer.

“Through this transformative combination, we expect to redefine the manner in which people and institutions move money and information,” Yabuki said in the press release. “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.”

“I have long admired what Fiserv has achieved over the years, and I look forward to working with the talented associates of both companies as we set a higher standard of innovation and service in the industry,” Bisignano said. “Our goal at First Data has always been to provide our clients with the most comprehensive suite of innovative, highly-differentiated solutions and services, and I am excited by the significant value that the combination with Fiserv creates for all stakeholders.”

The transaction is subject to regulatory approvals and is expected to close during the second half of 2019.