WASHINGTON (AP) - VeriFone Systems Inc., Hypercom Corp. and Ingenico SA have abandoned plans for Hypercom to sell its U.S. payment systems business to Ingenico SA in order to alleviate antitrust concerns about VeriFone’s proposed purchase of the rest of Hypercom.
The three electronic payment systems providers abandoned the planned transaction a week after the Justice Department sued to block both VeriFone’s purchase of Hypercom and the sale of Hypercom’s U.S. business to Ingenico.
The agency said the deals would harm competition and drive up prices in the market for point-of-sale terminals in the U.S. Such terminals are used by retailers and other firms to accept electronic payments with credit and debit cards.
The lawsuit to block the deal between VeriFone and Hypercom is still pending, and the two companies are in discussions with Justice Department officials to find an alternate suitor for Hypercom’s U.S. operations that would be acceptable to the government. In a filing with the Securities and Exchange Commission, VeriFone said it believes the purchase of Hypercom will be completed in the second half of the year.
VeriFone Systems, based in San Jose, Calif., announced plans to buy Hypercom of Scottsdale, Ariz., in November in an all-stock deal valued at about $485 million, including $65 million of debt. And last month, Hypercom said it would sell its U.S. payment systems business to France’s Ingenico for $54 million in cash to ease antitrust concerns about the deal with VeriFone. VeriFone would then acquire Hypercom’s remaining operations, including its networking products business.
But that did not satisfy the Justice Department since the three companies together account for more than 90 percent of all point-of-sale terminals in the United States. The sale of part of Hypercom’s business to Ingenico, the Justice Department said in a suit filed in U.S. District Court in Washington, D.C., would not create a new, independent competitor in the market and would make it easier for VeriFone and Ingenico to coordinate pricing for point-of-sale terminals.
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