U.S. sues to stop VeriFone buy of Hypercom
WASHINGTON (Reuters) - The Justice Department filed a lawsuit on Thursday to block credit card swipe machine maker VeriFone Systems Inc's proposed buy of smaller rival Hypercom Corp.
The department said the deal would reduce competition in the sale of point-of-sale terminals in the United States.
"The POS terminals industry, both in the United States and on a worldwide basis, is extremely concentrated and dominated by VeriFone, Hypercom and Ingenico," the department said.
In the United States, VeriFone had a 48 percent share, Hypercom had an 18 percent share and Ingenico, based in France, had a 26 percent share, the department said, citing a 2009 market analyst report.
VeriFone's plan to divest Hypercom's U.S. business to Ingenico "exacerbates, rather than mitigates, the antitrust issues raised by the original transaction," the Justice Department said in its complaint filed in the U.S. district court in Washington DC.
"The combination of VeriFone and Hypercom would likely lead to retailers paying higher prices for POS terminals," said Christine Varney, head of the Department of Justice's Antitrust Division, in a statement.
The department put the deal's value at $485 million when it was announced in November 2010.