Shareholders in Nets will become the largest shareholders in the combined group with about 40% of the company © Bloomberg

Italian payments provider Nexi has offered to buy Danish rival Nets in a €7.2bn all-share deal that marks the latest example of European groups racing to consolidate the fragmented digital sector. 

The two sides said on Monday that they had entered into 10 days of exclusive negotiations over a potential tie-up, which would come just weeks after Nexi agreed to combine with Italian rival Sia in a €15bn deal. 

If successful, the acquisition of both Nets and Sia would turn Nexi into one of Europe’s largest payments operators with a market capitalisation of more than €22bn. 

Milan-listed Nexi rose 0.8 per cent to €13.30 on Monday. At today’s prices, the deal would value Nets at €5.4bn before the inclusion of €1.8bn in net debt.

US private equity group Hellman & Friedman had been exploring a sale of Nets in recent months with US-based Global Payments seen as the frontrunner to buy the payments company for cash, according to several people involved. 

Talks between Nexi and Hellman & Friedman accelerated over the weekend after Global Payments suddenly pulled out of the race, saying it would no longer be pursuing acquisitions outside the US, the people said. One person close to Hellman & Friedman insisted that Nets selected to pursue the deal with Nexi over Global Payments.

If agreed, the deal would create a path for Hellman & Friedman to eventually fully exit its investments after agreeing to buy Nets for $5.3bn in 2017.

Shareholders in Nets will become the largest shareholders in the combined group with about 40 per cent of the company, one person involved in the deal said, adding that the transaction would be expected to complete before the Sia merger.

After the Sia deal closes, Nets’ shareholders would own about 30 per cent of the merged companies.

In a statement, Nexi said Nets’ shareholders including Hellman & Friedman would be expected to make “long-term lock-up commitments” and that estimated synergies of a deal amounted to €150m. In 2019 Nets and Nexi each generated revenues of about €1bn.

Since its purchase of Nets, Hellman & Friedman has sought to expand the business through a series of bolt-on acquisitions of smaller payments groups, including German group Concardis. It also cashed in on part of its investment by offloading the real-time payments unit of Nets to US group Mastercard in a $3.2bn deal last year. 

The deal would have to be vetted by Italian and European regulators. Last month the European Commission approved Worldline’s takeover of local French rival Ingenico for €7.8bn, subject to the divestment of certain payments activities in Austria, Luxembourg and Belgium.

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