First Data Corp. has reached an agreement with regulators that may enable the company to avoid antitrust opposition to its prospective acquisition of Western
Union Financial Services Inc.
Hackensack, N.J.-based First Data is one of several bidders expected to participate in a Sept. 19 bankruptcy auction of Western Union, which is best known for its huge money-transfer business.
First Data's latest offer for Western Union, bidding against Forstmann, Little & Co., is $660 million. Some observers expect the bidding to rise above $1 billion at September's auction.
The Federal Trade Commission, in its first antitrust challenge to a merger between two payment systems concerns, required First Data to sign a consent decree this week to ease concerns about the development of anticompetitive practices in the money-transfer business.
The FTC said it would not approve a First Data acquisition of Western Union unless First Data agreed to sell either Western Union's money-transfer business or its own, known as MoneyGram, upon completion of the deal.
Combining MoneyGram and Western Union's transfer business would create a monopoly, the FTC alleged.
"Absent the settlement, the FTC alleged that the acquisition would increase the likelihood that consumers, among other things, would be forced to pay higher transfer ,.fees and receive less service," the FTC said in a prepared statement.
Under terms of the proposed consent decree, which shortly will be published in the Federal Register for a 60-day public comment period. First Data will relinquish the rights to either the Western Union or MoneyGram trade name and withdraw from selling it.
To further ensure competition in the money-transfer business, First Data is also required under the agreement to provide personnel and training for six months to the purchaser.
First Data noted that the agreement allows it to process money transfer transactions for both MoneyGram and Western Union.
However, the consent decree establishes a 10-year period during which First Data must obtain FTC approval before acquiring any new businesses related to money-transfer services.
