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Payments processing giant Worldpay has agreed to a takeover by US fintech giant FIS in a deal valuing it at $43bn (£32bn).

Worldpay was once a division of state-backed Royal Bank of Scotland before being spun off and later taken over in 2017 by Ohio-based Vantiv, which assumed the Worldpay name.

The latest tie-up will create a combined group to be 53% owned by shareholders of Florida-based FIS and the remainder by Worldpay shareholders.

Based on 2018 figures it will generate $12.3bn (£9.3bn) of combined revenues. The companies expect to achieve $500m a year in savings.

Worldpay processes more than 40 billion payments a year across 146 countries, in 126 currencies. It employed 5,000 people at the time of its takeover by Vantiv in 2017.

FIS describes itself as a global leader in financial services technology, serving clients in banking, payments, capital markets, asset management and wealth and retirement markets, in 130 countries.

It employs more than 47,000 people worldwide.

FIS chairman and chief executive Gary Norcross said: "Upon closing later this year, our two powerhouse organisations will combine forces to offer a customer-driven combination of scale, global presence and the industry's broadest range of global financial solutions."

Worldpay boss Charles Drucker said: "We are proud to become part of one of the financial services industry's most respected and consistently performing companies, and I am excited about the new opportunities this brings both for the business and our colleagues worldwide."

The deal is the latest in a wave of consolidation in the financial software and payments technology sectors with firms bulking up to compete with new entrants to the market.

US-based Fiserv bought payment processor First Data Corp in January for $22bn.

Worldpay, set up in 1989, was for eight years part of Royal Bank of Scotland before being spun out to private equity ownership in 2010 under EU state aid rules after the bank's £45bn bail-out following the financial crisis.

London-listed shares in Worldpay were up 13% on the latest takeover deal.

Russ Mould, investment director at AJ Bell, said: "You need scale to win at payments processing and this deal certainly gives the two companies incredible breadth of coverage.

"Parking the two companies together gives the enlarged business a very strong position by which to play the structural growth in digital payments.

"They will be able to provide clients a wider portfolio of services, suggesting this is a highly complementary corporate tie-up."

The Wall

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