August and September are traditionally
quiet times for mergers and acquisitions, although a few notable
deals have been struck. For those hoping for the mega-sized deals
which dominated M&A activity just a few years ago, the wait
goes on. CI’s dealwatch keeps track of the deals taking place in
the industry.

It is just over a year ago since US
investment banking powerhouse Lehman Brothers filed for bankruptcy,
setting off the cataclysmic shock waves which echoed throughout the
global economy, resulting in bank nationalisation and
consolidation, government bail-out and economic stimulus packages,
and a swift descent into recession.

Although many countries now appear to be
heading out of recession, the last two months of merger and
acquisition activity have been muted. However, of the deals that
have been done, this dealwatch is characterised by the number of
card portfolios that have changed hands. In the US, Citigroup has
off-loaded around $1.3 billion worth of credit card portfolios,
while, in perhaps an indicator of the worsening state of the
private-label credit card sector, retailer Charming Shoppes has
decided to hand over its credit card assets to Alliance Data
Systems. In Europe, HSBC made the decision to offload its Polish
credit card and consumer finance portfolio to newly-established
Alior Bank.

While HSBC’s decision may be surprising, given
that Poland is regarded as a prime consumer finance and card growth
hotspot, it is not unreasonable for HSBC to turn its attention to
the more profitable premier and middle-class consumer segments
elsewhere, and leaving local banks such as Alior to use their
domestic expertise to cultivate the rapidly growing banking class
in emerging markets.

Mergers and acquisitions

Cards International dealwatch

Date

Bidder

Target

Value

Location

Business type

Notes

3/08/09

Metatron

Just Data

n/d

US

Payment processing

Metatron, a US internet holding company, has
said that it has entered into a Letter of Intent (LOI) with the
shareholders of Just Data, a Delaware corporation, to acquire 100
percent of the outstanding common stock and make Just Data a
wholly-owned subsidiary of the Company. The acquisition is expected
to close in early September but specific terms were not
disclosed.

13/08/09

Alliance Data Systems

Charming Shoppes

$110m

US

Card portfolio

Charming Shoppes is to sell its private label
credit card programme to Alliance Data Systems for about $110
million. The acquisition includes Charming’s private-label credit
card portfolio and certain assets and liabilities required to
support the cards. The two companies also signed a 10-year
operating deal related to the programme’s servicing.

13/08/09

FleetCor

Retail Decisions

n/d

US

Card portfolio

FleetCor, the global fleet card company, has
acquired the UK and Ireland fuel card businesses of Retail
Decisions (ReD). The acquisition includes all of ReD’s fuel card
operations in the UK and Ireland, including ReD’s network of UK
fuel bunkering outlets.

21/08/09

Elavon

MB Financial Bank

n/d

US

Merchant acquiring

Elavon, a payments provider and subsidiary of
US Bancorp, has acquired the merchant processing portfolio of MB
Financial Bank, the Illinois-local operating unit of MB Financial.
Elavon will provide payment processing solutions, customer service
and support operations to MB Financial Bank’s merchant
customers.

24/08/09

Monitise

Monilink

£1.5m

UK

Mobile payments

Monitise has bought out joint venture partner
VocaLink to take full control of UK mobile banking and payments
network Monilink. Monitise will pay an initial £1.5 million in cash
over three years for debt-free, 100 percent ownership of the
network. VocaLink will continue to provide Monilink with access to
its banking and payments infrastructure, in return for services
fees.

1/09/09

Western Union

Custom House

n/d

US

Payment service provider

Western Union, the US money transfer
specialist, announced it has completed the acquisition of
international business-to-business payments provider Custom House.
Custom House processes payments originating in seven countries for
payout in 120 countries.

1/09/09

n/d

Citi

n/d

US

Card portfolio

US bank Citigroup has sold $1.3 billion of
its credit portfolios, in three separate units. The portfolios were
part of Citi Holdings, one of the company’s segments resulting from
the split of Citi’s businesses earlier in the year. Citigroup will
continue to service the card portfolios through the first half of
2010 when the acquirer takes on those responsibilities.

3/09/09

Elan

Associated Bank

n/d

US

Card portfolio

US financial services company Elan has
purchased US financial institution Associated Bank’s credit card
portfolio. The portfolio will continue to be branded and marketed
under the Associated Bank name with Elan working behind the scenes
to run it. The portfolio will be converted in the second quarter of
2010, and all of the new products and services will be made
available to clients at that time.

4/09/09

Alior

HSBC Poland

$350m

Poland

Card portfolio

HSBC Bank Polska is to sell its HSBC
Credit-branded consumer finance portfolio and its credit card
portfolio, to Poland’s Alior Bank. The gross asset value of the two
portfolios was PLN1 billion ($350 million), with the deal expected
to run to completion in the fourth quarter of this year.

8/09/09

Gemalto

Trusted Logic

n/d

France

Payment technology

Gemalto, the European digital security
specialist, has announced that it has completed the acquisition of
Trusted Logic from its founders and other shareholders. Gemalto,
which already held 32 percent of the shares, has said it aims to
accelerate the international development of Trusted Logic
technologies. The terms of the transaction were not disclosed.

n/d=not disclosed Source: CI, company
reports