Blog Coverage MasterCard Acquires Majority Stakes in Britains VocaLink

LONDON, UK / ACCESSWIRE / July 22, 2016 / Active Wall St. blog coverage looks at the headline from MasterCard Inc. (NYSE: MA). In an endeavour to expand its presence in the growing business-to-business and person-to-person payments markets, MasterCard has struck a deal on July 21, 2016, to acquire 92.4% of VocaLink Holdings Ltd. for $920 million. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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VocaLink processes non-card electronic payments in the Britain and generates more than 90 % of its revenue, while MasterCard’s business across the globe processes payments between the banks of merchants and the card issuing banks or credit unions of the purchasers. VocaLink also handles communications between almost all of U.K.’s 67,000 automated teller machines. VocaLink is also developing a faster system for the bank-owned automated clearing house payments network in U.S.

The deal

Both firms held talks about the deal since November 2015, and the deal is likely to be completed in early 2017. VocaLink alone processes over 90% of salaries in the U.K., and majority household bills. The deal will allow MasterCard to expand its presence in the U.K. after competitor Visa Inc. boosted its presence there with the acquisition of Visa Europe for $23.4 billion in November 2015.

VocaLink’s stakeholders include 13 banks, building societies, etc., and will retain the remaining7.6% ownership and are subject to gain 169 million pounds more if certain targets are met. One of VocaLink’s largest stakeholders, Barclays, said in statement that it sold a majority of its shares to MasterCard for 104 million pounds and were left with only 1.5 % share.

Attractive investor destination

In a statement, the company said that Paul Stoddart will become CEO, while David Yates, the previous CEO, will continue to be the chairman and join MasterCard’s management committee. The deal which is the biggest for MasterCard since the company went public in 2006, is subject to regulatory approval from the European Commission and the U.K. Mr. Yates said during a call with analysts that the Brexit had “absolutely no impact” on the negotiations, and the Brexit also should not affect VocaLink’s core business in the region, he further added.

“MasterCard’s purchase shows that the U.K. remains an attractive destination for international investors,” Philip Hammond, the country’s chancellor of the exchequer, said in a statement.

Share Performance

On July 21, 2016, MasterCard’s shares declined marginally at 0.90% to close at $92.46 with a total of 4.34 million shares changing hands. The stock price has gained 7.81% in the previous six months.

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