UPDATE: Justice Department Sues To Stop VeriFone-Hypercom Deal
12 Maggio 2011 - 10:06PM
Dow Jones News
The U.S. Justice Department filed an antitrust lawsuit Thursday
to block VeriFone Systems Inc. (PAY) from acquiring Hypercom Corp.
(HYC), arguing that the deal would mean less competition in the
market for point-of-sale terminals.
The news sent the companies' shares down sharply.
The terminals are used by retailers to accept credit-card and
debit-card payments.
The Justice Department said the two companies control more than
60% of the U.S. market for terminals used by the largest
retailers.
The companies had sought to address potential antitrust concerns
by agreeing to sell Hypercom's U.S. business to Ingenico SA
(ING.FR), the largest worldwide provider of such terminals. The
Justice Department, however, said the proposed fix to the merger
was inadequate, noting that Ingenico was the only other significant
competitor to VeriFone and Hypercom in the U.S. market.
"The combination of VeriFone and Hypercom would likely lead to
retailers paying higher prices for POS terminals," U.S. Assistant
Attorney General Christine Varney, head of the department's
antitrust division, said in a statement. "The proposed divestiture
does not resolve the significant competitive concerns posed by the
merger, and in some ways exacerbates them."
Representatives for the three companies didn't immediately
respond to requests for comment.
The lawsuit was filed in a Washington, D.C., federal court.
VeriFone and Hypercom disclosed the proposed $485 million deal
last November.
In recent trading, VeriFone shares were off 8% at $45.98 while
Hypercom shares were down 14% at $9.31
-By Brent Kendall, Dow Jones Newswires; 202-862-9222;
brent.kendall@dowjones.com
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