Visa Inc. and financial-technology startup Plaid announced Tuesday that they’ve terminated their plans to merge following antitrust pushback from the Department of Justice.
Chief Executive Al Kelly said in a release that while he was “confident” that the payment giant would have succeeded in the antitrust lawsuit brought by the Justice Department, he believed that “protracted and complex litigation” would have likely taken “substantial time to fully resolve.” Visa and Plaid reached an agreement with the Justice Department to dismiss the litigation related to the proposed deal.
Shares of Visa fell 0.9% in after-hours trading Tuesday.
Visa announced its $5.3 billion deal for Plaid on Jan. 13, 2020. The company was eager to join with a new-school payment-technology player that allowed people to connect their bank accounts with popular fintech platforms like PayPal Holdings Inc.’s
“We are focused on accelerating our business by advancing our broader strategy and continuing to drive Visa’s three growth pillars: consumer payments, new flows, and value added services,” Kelly said in Visa’s release.
Plaid CEO Zach Perret said that his company has seen “an unprecedented uptick in demand” for its services over the past year. “While Plaid and Visa would have been a great combination, we have decided to instead work with Visa as an investor and partner so we can fully focus on building the infrastructure to support fintech.”
Visa shares have gained 1.2% over the past three months as the Dow Jones Industrial Average
has added 7.7%.