Visa Inc. and financial technology startup Plaid announced Tuesday that they have terminated their merger plans following the Justice Department’s antitrust retreat.
Visa V,
The chief executive, Al Kelly, said in a statement that while he was “sure” that the payment giant would have succeeded in the antitrust lawsuit filed by the Justice Department, he believed that “a long and complex litigation “it would have taken” a substantial amount of time to resolve “. Visa and Plaid reached an agreement with the Department of Justice to dismiss the dispute related to the proposed agreement.
Shares of Visa fell 0.9% in trading outside of Tuesday hours.
Visa announced its $ 5.3 billion deal for Plaid on January 13, 2020. The company was looking forward to joining a new school payment technology player that would allow people to connect their bank accounts with Popular fintech platforms like PYPL from PayPal Holdings Inc. ,
Venmo.
The Justice Department accused Visa of seeking to acquire Plaid to eliminate an emerging threat to its dominant debit business.
“We are focused on accelerating our business by advancing our broader strategy and continuing to drive Visa’s three growth pillars: consumer payments, new flows, and value-added services,” Kelly said in the Visa statement.
Plaid CEO Zach Perret said his company has seen “an unprecedented increase in demand” for its services over the past year. “While Plaid and Visa would have been a fantastic combination, we decided to work with Visa as an investor and partner so we can focus fully on building the infrastructure to support fintech technology.”
Visa shares have gained 1.2% in the last three months as the Dow Jones Industrial Average DJIA,
has added 7.7%.