Fiserv in negotiations to buy EDS' credit union business

BROOKFIELD, Wisc. -- Fiserv, Inc. (Nasdaq: FISV) says it is negotiating with EDS Corp. (NYSE: EDS) to acquire EDS' credit union industry group.

According to a news release, if the transaction is approved and completed, Fiserv expects to provide core processing services for about 34 percent of credit unions that outsource their processing operations.

Addressing potential concerns over its increased market share, Fiserv said in the release that it doesn't believe the proposed transaction would adversely affect competition to provide financial services to credit unions or other financial institutions. It cited a number of competitors, including Jack Henry/Symitar, Liberty Fitech andAurum Technology.

As credit unions compete for customers from banks, thrifts, mortgage banks and other financial institutions, traditional bank-oriented core processing providers increasingly serve credit unions as well, according to the release.

Fiserv in November purchased the Consumer Network Services of EDS, which processes more than 2.4 billion EFT transactions annually and drives 13,170 ATMs, for $320 million in cash. That acquisition made Fiserv the second largest third-party processor of EFT transactions in the U.S., with 4,000 clients (direct and indirect).

(See related stories Fiserv to buy EDS' CNS unit for $320 million cash and Fiserv assimilates EDS processing business, to acquire software provider)