Italian digital payments firms merge to create $17.6B fintech group

Italy's largest payments firm Nexi has struck a deal with its rival, SIA, to create a digital payments behemoth with a market cap of 15 billion euros.

Nexi's private equity owners Advent, Bain Capital and Clessidra will own 23% of the newly created fintech group.

On the eve of the deal's finalization, the Financial Times had characterized the merger as heralding the potential creation of "One of Europe's largest fintech groups."

Nexi is focused on the Italian market, whereas SIA has generated a third of its revenue overseas.

Nexi CEO Paolo Bertoluzzo said in an official statement that the merger will create "a large Italian PayTech company leader in Europe with scale and capabilities to play an increasingly leading role in Italy and at an international level in a market, like the European one, that sees strong consolidation trends."

The merged entity, with Bertoluzzo remaining as CEO general manager, will handle payments for roughly 2 million merchants and 120 million cards: over 21 billion transactions per year.

In merger negotiations, Bank of America, Mediobanca and HSBC acted as advisors for Nexi, with JPMorgan and Rothschild representing SIA. As reported earlier this year, consolidation in the digital payments sector has been strengthening.

In February, French fintechs Ingenico and Worldline merged to create the world's fourth-largest payments firm.

Like the wider fintech space, the blockchain industry has also seen its share of mergers and acquisitions.

In winter 2019, two major mining firms entered a merger agreement to create what they purported would be the world's largest mining firm.