$17.6 Billion Fintech Group: Italian E-Payments Giants Team Up

Two of the biggest Italian digital payment companies Nexi and SIA have reportedly high-fived for a new deal to create a domestic payments group with 1.8 billion euros ($2 billion) in revenue. The new firm’s executives plan to expand in Europe and compete with other digital payments companies.

Burying The Hatchet

Viewed as the two major rivals at the Italian electronic payments market, Nexi and SIA are expected to put together one of the biggest firms, picking up 70% of the domestic market share. The new entity will supposedly possess a market cap of 15 billion euros ($17.6 billion).

As per a recent report, after year-and-a-half talks on the matter of governance and evaluation differences, the merge is expected to become the largest equity deal in 2020. The agreement values SIA (controlled by the Italian state investment agency Cassa Depositi e Prestiti (CDP)) at 4.6 billion euros, which is estimated to be half the market size of Nexi.

According to Reuters, CDP will own a quarter of the new-found group, which makes it the single biggest shareholder in the firm. Next are Nexi’s private equity owners Advent, Bain Capital, and Clessidra, with a total of 23%.

Reportedly, the new entity will have a roughly 70% market share in Italy.

The Future Of European E-Payments In Numbers

As per the publication, the new fintech company is about to become a leader in Europe. The predictions are that it will handle payments for about 2 million merchants. The firm will also manage 120 million cards and process more than 21 billion transactions per year.

Taking a glimpse into the future, Nexi’s CEO Paolo Bertoluzzo, who will lead the new group, foresees that “three years from now,” the company will grow internationally.

Italy is trying to make a hard turn towards electronic payments. As per the report, the transformation will also be considered as a means in the battle against the so-called “black economy.”

The COVID-19 situation is also among the levers that push the switch a bit away from banknotes and closer to digital payments.