Visa, Plaid call off $5.3B deal

U.S. government lawsuit aimed at stopping the proposed transaction on antitrust grounds

Visa and financial technology company Plaid said on Tuesday that they would terminate their $5.3 billion merger agreement following a U.S. government lawsuit aimed at stopping the proposed transaction on antitrust grounds.

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The U.S. Justice Department had sued to stop the deal in November, saying that Visa was a "a monopolist in online debit transactions" and that the proposed acquisition "would eliminate a nascent competitive threat" to that monopoly.

The deal, which was proposed in January 2020, was scrapped to avoid protracted litigation, said Al Kelly, chairman and CEO of Visa Inc.

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"We are confident we would have prevailed in court as Plaid's capabilities are complementary to Visa's, not competitive," he added.

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V VISA INC. 312.80 +2.87 +0.93%

Visa said in January it had agreed to buy the privately held startup Plaid in a $5.3 billion deal aimed at boosting the payments giant's access to the booming financial technology sector.

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(Reporting by Diane Bartz in Washington and Praveen Paramasivam in Bengaluru; Editing by Shounak Dasgupta and Rosalba O'Brien)