UK watchdog consider Mastercard compromise offer
The Competition and Markets Authority (CMA) is the body that makes sure that big businesses cannot negatively impact on competition or fair trade in the UK. Now, they are considering a compromised measure by Mastercard to try and push through their deal to purchase Vocalink.
According to widespread reports across financial and business publications, Mastercard have made a proposal to the CMA after they expressed initial concerns over the planned £700 million acquisition of Vocalink. Mastercard have allegedly agreed to reduce the costs to the Link ATM network for switching infrastructure providers.
It was only earlier this month that the CMA announced that they feared the acquisition would give Mastercard too much control and too much of an advantage over their competitors, particularly when it comes to bidding for contracts relating to the Link industry.
Mastercard share price over the last year
As of 18 January 2017: 109.10
SOURCE: Yahoo Finance
It is unsurprising that the CMA are concerned over the control of the Link network in the UK, considering it accounts for over 70,000 cash machines across the UK and Europe.
Karl Flinders, writing in Computer Weekly, said: ‘Services run by VocaLink include Bacs and the Faster Payments Service (FPS), as well as Link. Through these and other services, VocaLink processes more than 90% of salaries, 70% of household bills and almost all state benefits in the UK. Since the CMA ultimatum, Mastercard and VocaLink have proposed allowing any new competitor to use VocaLink’s connectivity to members of the Link ATM network, rather than having to build their own.’
Dominion holds Mastercard in its Global Trends Managed Fund.
If you would you like to receive the Newsfeeds daily, please click here to sign up now!Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
- Click here to print this story: Print
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.