Strategic partnership between Worldline and SIX consolidating European payments

Last Updated: Wed, May 16, 2018 18:51 hrs
Worldline

Bezons, France: Worldline, [Euronext: WLN] a leader in the world of payments and transactional services industry announced a release confirming a strategic acquisition with SIX. According to the release, Worldline agreed that it signed an agreement to enter into a strategic partnership where Worldline would acquire SIX Payment Services, the payment services division of SIX, for a consideration of 2,303 million euros (CHF 2,750 million).

The transaction will comprise of 49.1 million new Worldline shares to be issued, representing 27% of the share capital; and 283 million euros (CHF 338 million) in cash, subject to customary net debt and working capital adjustments.

The transaction is expected to close during the fourth quarter of 2018, after the finalization of the carve out of SIX Payment Services from SIX Group and a Worldline Extraordinary General Meeting that will approve the issuance of new Worldline shares in exchange for the contribution of SIX Payment Services to Worldline.

The transaction is also subject to work councils’ information and European companies work council consultation processes in Worldline and Atos European companies work council, as well as customary antitrust and regulatory approvals.

The release highlighted that as one of the leading companies in European payments today, SIX Payment Services is partnering with Worldline to create a leading and largest European payments provider. The respective markets of both partners complement each other very well. New technologies can be jointly and efficiently developed and implemented from a position of strength.

In November last year, SIX as part of its strategic redirection announced that the cards business (merchant acceptance & acquiring and international card processing) will be carved-out with the aim to enter a strategic partnership. The European payments industry is consolidating, and large players with a broad product and geographic offering are gaining a competitive edge.

SIX Payment Services has a net revenue of nearly 530 million euros operating in 6 countries with over 1,600 staff and is a leader in DACH region with commercial acquiring market positions in Switzerland, Austria and Luxembourg and a sizeable presence in Germany.

SPS's home market is Switzerland, but it has executed successfully numerous cross-border acquisitions. Notable among these are Paylife in Austria in 2013, Cetrel in Luxembourg in 2014 and in 2017 a subsidiary of VÖB-ZVD in Germany and Aduno, its competitor in Switzerland.

With 81 % of its turnover in merchant services (nearly 430 million euros), SIX Payment Services is one of the largest and most successful non-bank commercial acquirers in Continental Europe, servicing nearly 210.000 merchants both off-line and on-line. It also has a significant scale in Financial Services, delivering revenues of nearly 100 million euros from financial processing services to 180 banks and financial institutions, in particular to the Swiss banking community.

"Through this merger, our Company with its intact financial firepower and its unrivalled size in our continent, will be better positioned than ever to continue its strategic endeavor to build, in the heart of Europe, a new global leader of the payment industry," said Gilles Grapinet, Worldline's CEO.

Romeo Lacher, Chairman of the Board of Directors of SIX said, "In an environment that has recently excelled above all through consolidation, we are actively shaping this development so that going forward we can continue to be the central provider of payment services in the financial market infrastructure sector for our customers in the future. We are very happy that in Worldline we have found a well-known and strong international partner who will work with us to advance and further develop the payment business. This strategic partnership makes us Europe's leading and largest provider in one go. In the future, in addition to the existing SIX Payment Services offering, our customers will also benefit from Worldline's innovative solutions along the entire value chain of cashless payment transactions."

"The strategic agreement announced today between Worldline and SIX is of fundamental importance in the European payment industry. I am very honored that Worldline has been selected by SIX, after a very competitive process, as the right partner to join forces with their leading payment business," said Thierry Breton, Atos Chairman and Chief Executive Officer, Worldline Chairman.

"More than ever, Worldline thanks to its strong industrial culture and track-record since its 2014 IPO and its privileged access to the leading Atos technologies, confirms its perfect positioning and its unique ability to be the perfect long-term payment partner for the European financial industry in these times of deep regulatory and digital transformations of the sector." added Brenton.

Transaction benefits for Worldline

The merger of SIX Payment Services within Worldline would allow major enhancement to the business profile and positions of the combined group as follows:

  • +30 % Group revenue increase and staff increase of +1.600 (+17 %)
  • +65% increase in the Merchant Services business attaining over € 1 billion annual revenue and a n°1 position in continental Europe
  • Major rebalancing of Worldline European geographic presence thanks to the acquisition of many new leading positions in the DACH region
  • +12% increase in the Financial Services business, which will reach c. € 900 million revenue, further reinforcing its existing n°1 position
  • A new 10 year commercial relationship, through and with SIX, to deliver financial processing services to the Swiss banking ecosystem, long term oriented quality of services and best-in-class innovation.

In Merchant Services, the acquisition of SIX Payment Services would be a clear quantum leap allowing Worldline to establish itself as the n°1 non-bank acquiring platform in Continental Europe, through the following transformational impacts:

  • New market positions in Switzerland, Austria, Luxembourg and major reinforcement in Germany, complementing the existing strong position of Worldline in Belgium, the Netherlands, France and Germany
  • Many new leading specialized solutions and offers coming from SIX Payment Services (Travel, Hotels, restaurants, DCC2, …) would complement the strong innovative portfolio of Worldline (online gateways, mobile payments, Payment terminals, …)
  • Massive benefits for the merchant customers base of both companies, thanks to an unparalleled Merchant Services offering across physical and online payments, vertical segments, pan-European geographic reach, and capabilities
  • Unique positioning as the most attractive bank partner for successful alliances in payment acceptance and commercial acquiring.

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