Mastercard buys Nets unit for US$3.19b in largest takeover

[NEW YORK] Mastercard Inc said it agreed to buy a payments platform owned by Denmark-based Nets for US$3.19 billion, using its biggest-ever acquisition to help extend a push into faster payments.

With the deal, Mastercard is getting an electronic-billing platform and clearing and instant-payment services, according to a statement Tuesday. The deal is expected to hurt profit for as long as two years after it's completed, which is expected in the first half of 2020.

"The global opportunity for real-time payments is accelerating," Michael Miebach, Mastercard's chief product and innovation officer, said in the statement. "This deal strengthens our unique position as the one-stop partner for any bank, merchant or government's payment needs."

On Monday, the Federal Reserve announced it will build its own real-time gross settlement system for payments in the US after merchants including Amazon.com Inc and Walmart Inc said such a move would help improve card payments in the US. The Fed's system will compete directly with a system built by the largest US banks through an association called The Clearing House, which used Mastercard technology to build its network.

Mastercard has already spent US$1.1 billion this year on acquisitions and strategic equity investments as the firm has sought to push into new markets and develop new forms of electronic payments, Robert Napoli, an analyst at William Blair & Co, said in a note to clients on Monday.

Earlier this year, Mastercard announced its purchase of Ethoca, which helps merchants identify fraud, and Vyze, a point-of-sale payment provider. The company also acquired Transactis, which helps with bill payments, and Transfast, a cross-border payments network. The company warned last week that expenses will rise more than analysts expected in the third quarter.

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