Visa is scrapping a $5.3 billion merger with Plaid Inc., due to an antitrust challenge from the U.S. Department of Justice. The merger’s abandonment leaves the fintech startup in limbo, with plans for a public offering now on the cards. Here are all the details of the failed Visa and Plaid merger.
Antitrust Suit Forces Visa to End Merger Talks
Visa is abandoning its $5.3 billion acquisition of fintech firm Plaid. The merger sought to create a leading platform for online debit transactions through the Visa network.
While the merger was announced over a year ago, the Department of Justice (DOJ) stated its intention to sue to stop the merger in November 2020. The DOJ stated it saw the potential acquisition of Plaid by Visa as creating a “monopoly in online debit transactions.”
In a statement concerning the merger’s end, Visa CEO Al Kelly cited “protracted and complex litigation” that would require “substantial time to fully resolve.” As part of the end of the acquisition, the DOJ has agreed to end its antitrust lawsuit.
For its part, Plaid says it will now work with Visa as a partner, hoping to “fully focus on building the infrastructure to support fintech.”
What Next for Plaid?
According to financial experts, the failed merger and acquisition will likely have one result for Plaid. One venture capitalist, speaking to Barron’s, says Plaid is destined for the stock market. A public offering for the company would probably take the form of a traditional initial public offering, a particular purpose acquisition vehicle, or a direct listing, expert fintech bankers and venture capitalists told the news site.
Visa and Fintech
Visa has been aggressive in its partnerships with fintech. The payment giant has a fintech fast-track program designed to accelerate the integration process of fintech companies into the traditional credit and debit card space.
This program includes launching two credit cards that earn Bitcoin rewards: the BlockFi Credit Card and the Gemini Credit Card. Visa is also partnering with the NFL to launch the first cash-free Super Bowl customer experience this February.
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