2 Min Read
LONDON (Reuters) - Britain's competition watchdog said it has concerns with MasterCard Inc's (MA.N) acquisition of UK payment processing company VocaLink Holdings, following a review of the ownership and competitiveness of companies supporting those systems.
"A number of industry participants have raised concerns with the transaction," the Competition and Markets Authority said in a statement on Wednesday.
The companies are two of the three most credible providers of infrastructure services to the LINK network of automated teller machines, the CMA said, meaning the $920 million merger could reduce LINK's negotiating power with those providers if they combined.
A spokesman for MasterCard said it would address the watchdog's concern, adding that the CMA had said it had no other worries about the deal.
"We're pleased to have the opportunity to address their one concern, regarding the LINK ATM scheme, in the timeframe provided," the spokesman said in an email.
MasterCard said in July it would buy a 92.4 percent stake in London-based VocaLink Holdings Ltd for about $920 million.
The companies have until Jan. 11 to address the CMA's concern.
The LINK network connects over 70,000 cash machines, nearly every single one in the United Kingdom, and is one of three major payment systems in the UK.
The network allows customers of banks and building societies connected to LINK to withdraw cash from any of those machines.
The CMA said it found the deal would not impact the other two networks since they had many credible potential bidders for service contracts.
"The companies can avoid the merger being referred for an in-depth investigation if they can offer a remedy to address the competition concerns identified," the CMA said.
Britain's finance minister Philip Hammond in July hailed MasterCard's planned takeover of VocaLink as a sign of foreign investors' continued confidence after Britain's decision to leave the European Union.
Reporting By Lawrence White; Editing by Susan Fenton