Mastercard Inc (NYSE:MA) today announced that it has agreed to buy London based VocaLink Holdings Ltd for £700m with the prospect of adding £169m if performance targets are met.
The US based card issuer is the world’s second largest payment network provider and its latest move to acquire a London based firm shows its growing presence on the UK market. Mastercard will buy a 92.4% stake in VocaLink in a deal that will see VocaLink shareholders retain a 7.6% stake in the company for a minimum of three years once the transaction has been processed.
VocaLink is a system that processes automated payments for banks, government agencies and businesses handling in total up to £6 trillion UK payments a year. It operates as a collection of 18 banks all induced in shared ownership including Barclays, HSBC, Lloyds, RBS and Santander.
Royal Bank of Scotland has one of the highest stakes in VocaLink at 21.4% and is expected to see profits of up to £150m. Other owners, such as Barclays, who today announced they will share the majority of their 15.2% stake, will earn up to £133m from the sale. Co-op Bank, one of the smaller shareholders of 3.3%, will earn up to £28.3m.
Mastercard chief executive Ajay Banga said:
“We’re excited about the opportunity to play a bigger role in payments in the UK, a very strategic market for us,”