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Visa and Plaid scrap $5.3 billion merger agreement

January 12, 2021. Summarized by summa-bot.

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Visa and fintech startup Plaid have terminated their $5.3 billion merger agreement after facing a legal challenge from the Department of Justice.

New York (CNN Business)Visa and fintech startup Plaid have terminated their $5. 3 billion merger agreement after facing a legal challenge from the Department of Justice.

In a statement announcing merger's end Tuesday, Visa CEO Al Kelly cited "protracted and complex litigation" that would take "substantial time to fully resolve. "

Kelly said he was confident Visa would have ultimately won the legal battle for the deal, and that he believes Plaid's capabilities as "complementary" and "not competitive. "

"This past year saw an unprecedented uptick in demand for the services powered by Plaid, and our priority is to support the hundreds of millions of people who now rely on fintech," said Zach Perret, CEO and co-founder of Plaid, in a statement.

In its lawsuit, the DOJ alleged that Visa is a "monopolist in online debit transactions," and a new service in development by Plaid could pose legitimate competition to Visa's business.

Plaid says that although the two companies would have been a "great combination," it will now work with Visa as an investor and partner to "fully focus on building the infrastructure to support fintech. "

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