Visa Inc. and financial technology startup Plaid announced Tuesday that they have ended their merger plans following the antitrust push by the Justice Department.
Visa V,
Chief Executive Al Kelly said in a statement that while he was “confident” that the payment giant would succeed in the antitrust lawsuit filed by the Justice Department, he believed that “a prolonged and complex litigation” would likely take “substantial time.” “Visa and Plaid have reached an agreement with the Department of Justice to dismiss disputes over the proposed agreement.
Visa shares fell 0.9% on Tuesday after trading after the program.
Visa announced its $ 5.3 billion deal for Plaid on January 13, 2020. The company was eager to join a new payment technology player that allowed people to connect their bank accounts with popular fintech platforms. such as PYPL by PayPal Holdings Inc. ,
Venmo.
The Justice Department has accused Visa of seeking to acquire Plaid to eliminate an emerging threat to its dominant debit business.
“We are focusing on accelerating our business, advancing our broader strategy and continuing to drive the three pillars of Visa growth: consumer payments, new flows and value-added services,” Kelly said in a Visa statement.
Plaid CEO Zach Perret said his company had seen “an unprecedented increase in demand” for its services in the past year. “While Plaid and Visa would have been a great combination, we decided to work with Visa instead as an investor and partner so we can focus on building the infrastructure to support fintech technology.”
Visa shares have gained 1.2% in the last three months as DJIA Dow Jones Industrial,
added 7.7%.