(Bloomberg) — Italy’s Nexi SpA and SIA SpA are set to announce their merger after their boards meet Sunday to approve a deal to create one of Europe’s biggest payment providers, people familiar with the matter said.
As part of the agreement, Nexi would approve a reserved capital increase for SIA shareholders, with no cash component, said the people, who asked not to be named because the talks are private. Nexi would hold about 70% of the merged company and SIA 30%, they said. Cassa Depositi e Prestiti SpA, SIA’s main investor, would have about 25% of the merged entity, the people said.
Nexi and SIA spokespeople had no comment. The merger announcement could come soon as before the market opens on Monday, said the people. Newspaper Repubblica reported the news earlier.
The firms wrapped up more than a year of negotiations over a combination as payment providers across Europe look for deals that can add scale. Combining the two Italian companies would create a stronger competitor to France’s Worldline SA, which agreed in February to acquire Ingenico Group SA in a 7.8 billion-euro ($9.1 billion) deal.
Discussions have been on the brink of collapse several times over divergences on governance and valuations. In the last few weeks talks intensified after SIA reached an accord to keep Italian lender UniCredit SpA as its main client, a key sticking point in determining its valuation, people with knowledge of the matter have said.
SIA, which is mainly owned by the Italian government through its Cassa Depositi arm, counts Nexi and UniCredit among its biggest customers. In February, SIA’s board approved a plan for its own listing, after Nexi raised $2.3 billion in Europe’s biggest IPO last year that left its main investors, Advent International, Bain Capital and Clessidra SGR, with a jointly 33% stake.
Milan-based Nexi is Italy’s biggest payment-services company, operating in merchant servicing, card payments and digital solutions. The funds are set to dilute their stake even further to below 24%, according to the discussed merger terms.
(Updates with terms from second paragraph.)
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