Fintech company Global Payments (GPN.N) has agreed to buy rival Worldpay from FIS (FIS.N) and private equity firm GTCR for $22.7 billion, sharpening its focus on merchant services in its race for big-business clients in a crowded payments market.
Under the deal announced on Thursday, Global Payments will sell its slower-growing issuer solutions unit, which offers card processing and account services, to FIS for $13.5 billion.
The deal will allow Global Payments to combine Worldpay's strength in online and enterprise transactions with its expertise in serving small and mid-sized companies.
The merger creates a global payment processing company that would serve more than six million customers, process about 94 billion transactions and generate $3.7 trillion in volume across more than 175 countries.
Key competitors in this space include Fiserv (FI.N), PayPal (PYPL.O), Dutch fintech company Adyen (ADYEN.AS) and Stripe and Block (XYZ.N).
"After several years of uninspiring merchant organic revenue growth and what we consider a lack of strategic cohesiveness, this transaction is a bold step for Global management — and long overdue," William Blair analyst Andrew Jeffrey said in a note.
Shares of the company, which has a market value of more than $20 billion, fell 9.8% in early trading, while FIS, also known as Fidelity National Information Services, rose 3.4%.
While the shares of both companies have trailed the S&P 500 index, Global Payments' stock has significantly underperformed rival FIS over the past year.
"This transaction provides us with one of the world's most feature rich platforms to support ecommerce and enterprise customers," Global Payments CEO Cameron Bready said.
The deal marks FIS' exit from merchant services. It bought Worldpay for $43 billion in 2019, but sold its 55% stake to GTCR in 2023 at a valuation of $18.5 billion as the payments processor lost ground to traditional players and fintech startups.
For its stake in Worldpay, GTCR will get shares of Global Payments valued at $97 each, giving it a nearly 15% ownership interest in the combined company, valued at about $21 billion.
The deals are expected to close in the first half of 2026, subject to regulatory approvals.
Global Payments plans to finance the acquisition through proceeds from the Issuer Solutions sale, cash on hand and new debt, including a $7.7 billion debt issuance.
The combined entity is expected to generate about $12.5 billion in adjusted net revenue and $6.5 billion in adjusted core earnings.
