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Visa Inc. and fintech startup Plaid announced on Tuesday that they had ended their proposed merger following the Justice Department’s antitrust crackdown.
Visa V,
Managing Director Al Kelly said in a statement that if he was “confident” that the payments giant would have succeeded in the Department of Justice antitrust lawsuit, he believed a “long and complex litigation” would likely have taken “a long time to be fully resolve.” Visa and Plaid have reached an agreement with the Justice Department to dismiss litigation over the proposed deal.
Visa shares fell 0.9% on Tuesday after-hours.
Visa announced its $ 5.3 billion Plaid deal on January 13, 2020. The company was eager to join a new school payment technology player that allowed people to connect their bank accounts to platforms. popular fintech such as PYPL from PayPal Holdings Inc.,
Venmo.
The Justice Department accused Visa of seeking to acquire Plaid in order to eliminate an emerging threat to its dominant debit business.
“We are focused on accelerating our business by advancing our broader strategy and continuing to drive Visa’s three growth pillars: consumer payments, new flows and value-added services,” said Kelly. in the Visa release.
Plaid CEO Zach Perret said his company had seen “an unprecedented surge in demand” for its services over the past year. “While Plaid and Visa would have been a great combination, we instead decided to work with Visa as an investor and partner so that we could fully focus on building the infrastructure to support fintech.”
Visa shares have gained 1.2% in the past three months, the Dow Jones Industrial Average DJIA,
added 7.7%.
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