On December 17, the terminal manufacturer Ingenico announced it was considering the acquisition proposal of all its capital shares. The following Monday, they decided to reject this proposal seemingly because of State-owned shareholder Safran (with 22.5%). Meanwhile, we learnt that the potential acquirer was the American industrial holding Danaher (like Warren Buffett's holding).
This refusal –despite the significant amount proposed– seems related to France's fear that strategic assets might be controlled by a foreign country.
On this occasion, the media focussed on summarizing the partly completed concentration in this sector. Since Verifone-Hypercom merger, which became the world number one in November, these two rivals may gather 85% of all market shares.
It was, in the first place, believed that the software vendor Sage was responsible for this hostile bid. Sage does propose payment software, through its subsidiary, Sage Payment Solutions. Last October, the two companies partnered to provide US SMBs with a service including payment terminals and software.
The CEO, Philippe Lazare, claimed that this quasi-duopoly did not worry Ingenico, which approached Hypercom in 2008. On the contrary, according to him “pressure on pricing should settle down” because Hypercom's competitive aggressiveness was disturbing the two market leaders. In addition, Ingenico intends to take advantage of new opportunities in the United States after Verifone's necessary asset transfer to comply with competition requirements.
Even though debated, Ingenico's leaders' initial interest in Danaher's bid can be explained by two factors:
During the past two months, its rival Verifone got hold of Gemalto
and Hypercom / Thales: in so doing it became the world leader. This
situation undoubtedly increases competitive pressure, notably on the
French domestic market. This offer came at an appropriate time to add
value to the company, the recent strategic investments of which would
ensure long term profitability. Ingenico's diversification started in
2009, notably with its going up the scale in point of sale service
offers, arouses analysts’ approval. This is reflected in the improvement
of its stock market's price in 2010.