Justice reaches settlement to allow First Data-Concord merger
Monday, December 15th 2003, 12:00 am
By: News On 6
WASHINGTON (AP) _ The Justice Department announced a settlement Monday of a lawsuit that had blocked First Data Corp.'s $7.3 billion takeover of Concord EFS Inc.
The agreement, announced the day a government lawsuit seeking to block the merger had been scheduled for trial, requires First Data to sell off NYCE Corp., the nation's third-largest personal identification (PIN) number network.
If approved by a federal judge, the settlement will ensure continued competition in the electronic transaction industry between NYCE and the STAR network operated by Concord, Justice Department officials said. STAR is the nation's largest PIN network used at banks, retail stores and other businesses.
``This settlement is a victory for American businesses and consumers,'' said R. Hewitt Pate, assistant attorney general for antitrust matters. ``This settlement ensures that American businesses will pay competitive prices for PIN debit transactions and that consumers will benefit from that competition.''
The Justice Department had sought to block the original merger, arguing that it would permit a single company to control an estimated 45 percent of the electronic transaction market and would likely trigger higher prices for merchants and consumers.
Also joining in the settlement Monday were the District of Columbia and the states of Connecticut, Illinois, Louisiana, Massachusetts, New York, Ohio, Pennsylvania and Texas.
First Data, based in Greenwood Village, Colo., owns 64 percent of the NYCE Corp. network, which will now be divested. First Data had worldwide revenues of $7.6 billion in 2002.
Concord, based in Memphis, Tenn., reported revenues of almost $2 billion in 2002.