Nexi, Italy’s largest payment company, has entered into an agreement with rival SIA, to create a digital payment giant with a market value of 15 billion euros ($ 17.6 billion). It is assumed that the share of new businesses in the domestic market will be 70%.
According to a Reuters report from October 5, the entire share transfer agreement will give Nexi about 70% of the recently merged company, at a capital cost of € 4.6 billion ($ 5.4 billion). The private equity holders of Nexi Advent, Bain Capital and Clessidra will own 23% of the newly established fintech group.
At the end of the agreement, the Financial Times described the merger as a precursor to the possible establishment of “one of the largest fintech groups in Europe”.
Cointelegraph previously reported of Nexi, which was involved in piloting a large interbank system in Italy in 2018. Nexi is focused on the Italian market, while SIA earned a third of its revenue abroad. Both Nexi and SIA are headquartered in Milan, and negotiations have allegedly gone on for more than 18 months due to continued hesitation over management terms and assessments.
Nexi CEO Paolo Bertoluzzo said in an official statement that the merger will create “a leading Italian PayTech company in Europe […] with scope and ability to play an increasingly leading role in Italy and internationally in a market such as the European market which sees strong trends towards Monotheism “.
Reuters notes that the COVID-19 pandemic is expected to lead to an increase in digital payments in Italy, which has so far lagged behind other European countries as it shies away from cash.
The combined company, of which Bertoloso remains CEO, will process payments for nearly 2 million merchants and 120 million cards: more than 21 billion transactions annually.
Under certain conditions, the merger is planned to be completed by the summer of 2021.
In merger negotiations, Bank of America, Mediobanca and HSBC acted as advisors to Nexi, while JPMorgan and Rothschild represented SIA.
As reported earlier this year, consolidation in the digital payments sector is accelerating. In February, French financial technology companies Ingenico and Worldline teamed up to create the fourth largest payment company in the world.
As with the wider financial technology field, the blockchain industry has also seen a share of mergers and acquisitions. In August last year, Consensys acquired an enterprise copy of the Ethereum blockchain from JPMorgan, Quorum. Binance CoinMarketCap and the Indian exchange WazirX, while the American exchange Coinbase also bought smaller platforms. In the winter of 2019, two large mining companies entered into a merger agreement to create what they believe will be the largest mining company in the world.