MILAN (Reuters) – Italian payment group Nexi NEXII.MI said on Sunday it would merge with smaller rival SIA to create a digital payments company with a capitalization of over 15 billion euros ($17.6 billion).
Nexi and SIA, which is controlled by Italian state lender Cassa Depositi e Prestiti (CDP), have been in merger talks for more than a year-and-a-half, but differences over pricing and governance have proved a sticking point.
The new company would have proforma aggregated revenues of 1.8 billion euros and adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) of 1.0 billion euros as at Dec. 31, 2019, the statement said.
The accord is an all-share deal, with Nexi getting about 70% of the merged company and SIA some 30%, the statement said. SIA shareholders will receive 1.5761 Nexi shares for each SIA share.
“CDP, indirectly through CDP Equity and investment vehicle FSIA Investimenti, will have an aggregate stake in the new Group slightly in excess of 25% and Mercury will have a stake of 23%,” the statement said.
In recent weeks SIA has reached an agreement to keep UniCredit as a client and to extend the contract, removing a major hurdle in determining the company’s valuation in its talks with Nexi, sources said.
The payment sector has seen a wave of mergers and acquisitions, led by U.S. rivals seeking to build up their share of digital transactions.
French rival Worldline WLN.PA agreed to buy local peer Ingenico in February in a 7.8 billion euro deal that will create the fourth-biggest payments company in the world.
CDP has been looking for a deal with Nexi to create a national champion in the payment market and secure important financial infrastructure, sources said.
Reporting by Elisa Anzolin; Additional Reporting by Aishwarya Nair in Bengaluru; Editing by Crispian Balmer, Barbara Lewis and Richard Pullin