Justice Department Reaches Settlement To Allow First Data-Concord Merger

WASHINGTON (AP) -- The Justice Department announced a settlement Monday of a lawsuit that had blocked First Data Corp.'s $6.9 billion takeover of Concord EFS Inc.

The agreement, announced the day a government lawsuit seeking to block the merger had been scheduled for trial, requires First Data to sell off NYCE Corp., the nation's third-largest personal identification (PIN) number network.

If approved by a federal judge, the settlement will ensure continued competition in the electronic transaction industry between NYCE and the STAR network operated by Concord, Justice Department officials said. STAR is the nation's largest PIN network used at banks, retail stores and other businesses.

"This settlement is a victory for American businesses and consumers," said R. Hewitt Pate, assistant attorney general for antitrust matters. "This settlement ensures that American businesses will pay competitive prices for PIN debit transactions and that consumers will benefit from that competition."

Charlie Fote, First Data chairman and chief executive, said the settlement `"removes uncertainty and allows the companies to proceed with achieving the benefits of this merger. We also believe the new financial terms represent a fair value for both sets of shareholders."

The merger's $6.9 billion value was based on First Data's closing stock price on Friday of $39.30, the companies said in a joint statement. They also said the end date for the merger was being extended from Jan. 31 to April 30 to allow more time for shareholder approval.

The Justice Department had sought to block the original merger, arguing that it would permit a single company to control an estimated 45 percent of the electronic transaction market and would likely trigger higher prices for merchants and consumers.

Also joining in the settlement Monday were the District of Columbia and the states of Connecticut, Illinois, Louisiana, Massachusetts, New York, Ohio, Pennsylvania, and Texas.

First Data, based in Greenwood Village, Colo., owns 64 percent of the NYCE Corp. network, which will now be divested. First Data had worldwide revenues of $7.6 billion in 2002.

Concord, based in Memphis, Tenn., reported revenues of almost $2 billion in 2002.