DENVER - First Data Corp. will not need to seek the approval of its shareholders for the revised terms announced last week under which it will acquire Concord EFS Inc.
According to a First Data announcement, the New York Stock Exchange will not require the transaction processor to get shareholder approval for the merger.
The company's shareholders approved the original merger plan on Oct. 28, but the Department of Justice sued to stop the merger on the grounds that it would concentrate too much market power in the hands of the combined entity, particularly in the market for PIN-based debit transactions.
First Data and Concord on Dec. 15 reached a settlement with the DOJ under which the merger can go forward. As part of the settlement, First Data agreed to sell its majority interest in the NYCE network.
The two companies also revised the financial terms of the acquisition, with First Data now to acquire Concord for about $6.9 billion, or about 9 percent less than the price agreed upon in the original merger agreement. It will exchange 0.365 shares of Fist Data common stock for each Concord share, down from the original ratio of 0.40 shares of First Data.
The deal is still pending approval of Concord shareholders.
The transaction, which is expected to close by the end of March, will create a combined entity with $10 billion in annual revenue and more than 31,000 employees. First Data expects efficiencies from the merger to result in cost savings of $205 million in 2006, the second full year of the merged entity's operation.
Under the consent decree it entered into with the DOJ, First Data has eight months to dispose of its 64 percent stake in NYCE.
