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Italian banking group Intesa Sanpaolo has agreed to divest its retailers’ payment business to Nexi in a €1bn deal.

The scope of divestment includes transfer of Intesa Sanpaolo merchant acquiring business comprising 380,000 points of sale to a Nexi subsidiary.

However, the Italian bank will continue to retain the sale force involved with acquiring new customers.

As part of the deal, Intesa Sanpaolo will receive shares in the unit, which the lender will sell for a corresponding cash consideration. A part of this proceeds will be used to acquire a 9.9% stake in Nexi for €653m from payment group’s shareholder Mercury UK HoldCo.

In a statement, Intesa Sanpaolo said: “The transaction will enable Intesa Sanpaolo to extract proper value from the acquiring activities currently carried out internally, through the contribution of its business line – taking into account that operating efficiently in this sector, in a competitive scenario of international scope, requires greater investment and economies of scale – while retaining an interest in a business with significant growth prospects.”

In a separate statement, Nexa announced that it has also entered into a long-term partnership with Intesa Sanpaolo.

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Under the partnership, the lender will promote and distribute Nexi-developed technological solutions and innovative services. For the same period, Nexi also becomes the sole partner of Intesa Sanpaolo in the acquiring activities.

The transaction is expected to complete next year, subject to regulatory approvals.

Through this transaction, Intesa Sanpaolo Group expects a net capital gain of €900m in consolidated income statement next year.