MasterCard to buy nearly all of London's VocaLink for $920 million

MasterCard Inc. announced Thursday a deal to buy 92.4% ofLondon-based VocaLink for 700 million British pounds, or about $920 million. As part of the agreement, VocaLink shareholders will retain a 7.6% stake in the company for at least three years, and have the potential to receive an additional 169 million pounds, or about $220 million, if performance targets are met. VocaLink operates payment technology platforms, including BACS, the automated clearing house which enables direct credit and debit payments between bank accounts, and LINK, the U.K. ATM network. MasterCard expects the deal to reduce earnings for up to two years after closure, as a result of product investment and integration costs. "We're excited about the opportunity to play a bigger role in payments in the UK, a very strategic market for us," said MasterCard Chief Executive Ajay Banga. The stock, which was still inactive in premarket trade, has lost 4.2% year to date, while the S&P 500 has gained 6.3%.

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