Written By Mergers and acquisition deals can be complicated and lengthy processes. When two large companies merge, the people involved in the negotiations are often required to sign non-disclosure agreements, which can prevent them from discussing certain aspects of the deal. But when Worldpay and FIS announced that their $43 billion deal was being called off due to an unresolved legal dispute, it became clear that something had gone very wrong. In this blog post, we’ll be exploring how an alleged “original sin” was responsible for derailing the merger between the two financial giants. We’ll look at what happened, why it happened and how similar legal issues can be avoided in future.
What is Worldpay?
Worldpay is a global payments processor that enables businesses to accept a variety of payment methods, including credit and debit cards, ACH transfers, and more. The company also offers a suite of related services, such as fraud prevention, data security, and so on. Worldpay was founded in 2001 and has since processed over $1 trillion in payments. The company is headquartered in Atlanta, GA.
What is FIS?
FIS is a global provider of financial services technology and outsourcing solutions. We help our clients move money, process payments and manage risk. We are the largest provider of these services in the world, with a presence in more than 130 countries.
FIS has been in business for more than 50 years and is a publicly traded company listed on the New York Stock Exchange. Our products and services are used by some of the world’s largest banks, retailers and payment processors.
The
In February 2018, Worldpay and FIS announced a $43 billion merger that would have created a payments powerhouse. However, just months later, the deal was called off amid concerns about the companies’ ability to integrate their businesses.
The so-called “original sin” of the deal was Worldpay’s $19 billion acquisition of Vantiv in 2015. The purchase had been financed with a large amount of debt, and as a result, Worldpay’s balance sheet was significantly leveraged when the FIS merger was announced. This raised concerns about the combined company’s ability to service its debt and meet other financial obligations.
In addition, there were concerns about the cultural fit between the two companies. Worldpay is a fast-paced, innovative organization while FIS is more risk-averse and conservative. It was unclear how the two cultures would mesh and whether or not they would be able to work together effectively.
Ultimately, these concerns proved to be too much for investors and the deal was called off. While it is still possible that the two companies could revive their merger talks at some point in the future, for now, they remain separate entities.
The Failed Merger
In 2018, Worldpay and FIS announced a $43 billion merger that would have created a global payments powerhouse. However, the deal was ultimately scuttled due to disagreements over who would run the combined company.
The failed merger is a cautionary tale for companies considering similar deals. It highlights the importance of due diligence and careful planning when combining two large organizations.
Worldpay and FIS had different cultures and ways of doing business, which quickly became apparent after the announcement of the merger. The two companies struggled to agree on key decisions, such as which products to keep and how to structure the new organization.
Ultimately, the cultural differences between Worldpay and FIS proved to be insurmountable. The deal fell apart just six months after it was announced, leaving both companies worse off than they were before.
Lessons Learned
When Worldpay and FIS announced their merger in 2019, it was hailed as a transformational deal that would create a global payments powerhouse. But just months later, the deal was scuttled amid concerns about the companies’ ability to integrate their disparate businesses.
In this article, we examine what went wrong and share some lessons learned from this failed merger attempt.
First and foremost, we learned that cultural differences can be a major obstacle to successful M&A. Worldpay and FIS came from very different cultures, with different approaches to business. This became evident early on in the integration process, when it became clear that the two companies had very different ways of doing things.
Secondly, we learned that technology integration is critical to successfully combining two companies. In retrospect, it is clear that Worldpay and FIS underestimated the challenge of integrating their complex systems and technologies. This proved to be a major obstacle to the success of the merger.
Thirdly, we learned that communication is key when undertaking a large-scale transformation like this. From the outset, there was a lack of communication between Worldpay and FIS, which made it difficult to align the two organizations on key decisions. This led to frustration and confusion among employees at both companies.
Finally, we learned that timing is everything when it comes to M&A. In retrospect, it is clear that Worldpay and FIS rushed into their merger without fully considering all of the implications. This
