Business

Mastercard swoops for Britain's ATM operator Vocalink

The company that operates LINK, the UK ATM network, has been sold to MasterCard Image copyright Getty Images

The business that controls Britain's cash points has been sold, in the second major UK company takeover by an overseas buyer this week.

Vocalink is being bought by America's Mastercard for up to £869m.

The company controls Link, the country's network of ATM machines, and supplies Bacs, the automated clearing house which processes direct debits.

It comes after Japanese firm Softbank said it had made a £24.3bn offer for Cambridge chip designer Arm Holdings.

The proposed deal from telecoms giant Softbank sparked concerns that British companies were now takeover targets following the post-Brexit slump in the pound to a 31-year low.

'Not opportunistic'

Vocalink is owned by a number of major banks including Barclays, Lloyds and HSBC and chaired by the Bank of England's former deputy governor Sir John Gieve.

A Vocalink spokesperson said the payment technology system operator had been in talks with Mastercard for eight months.

She denied it was an opportunistic move because of the falling value of sterling.

The new Chancellor of the Exchequer, Philip Hammond, said the Vocalink deal "shows that Britain remains an attractive destination for international investors".

Image copyright Getty Images

Earlier this year, the Payment Systems Regulator (PSR) recommended that the banks should loosen their grip on the country's payment systems because their ownership was hampering competition and innovation.

Mr Hammond said: "The Payment Systems Regulator recommended the UK's biggest banks sell their stakes in Vocalink to improve banking competition in the UK which will deliver clear benefits for challenger banks, fintechs (financial technology companies), UK consumers and small businesses."

Mastercard is buying 92.4% of Vocalink and the remaining stake will be held by the banks for at least three years.

Mastercard will pay £700m and an additional payment of up to £169m, depending on whether certain performance targets are met. Vocalink's spokesperson declined to detail what the targets were.

She added that it had been in touch with the Treasury, the Bank of England and the PSR about the deal.

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