November 18, 2010 / 4:52 PM / in 7 years

UPDATE 1-Global Payments to form JV with Spanish retail bank

* To pay 125 mln euros for 51 pct in JV

* Deal to modestly add to FY 2011 cash earnings

Nov 18 (Reuters) - Credit card processor Global Payments Inc (GPN.N) said it would pay 125 million euros ($169.7 million) in cash to own 51 percent stake in a joint venture to be formed with Spain’s retail bank La Caixa.

La Caixa would hold the remaining 49 percent and contribute its existing merchant acquiring business to the joint venture.

Global Payments said the transaction is expected to modestly hurt fiscal 2011 earnings per share, and modestly add to cash earnings.

“We expect to grow customer base by providing increased sales resources and focus on the merchant acquiring business,” Global Payments’ CEO Paul Garcia said.

The Atlanta-based credit card processor said it would fund the deal with a combination of existing cash resources in Europe and its credit facilities.

Shares of the company, which have fallen about 3 percent since the company reported its second-quarter results last month, were up 2 percent at $41.01 in morning trade on the New York Stock Exchange. (Reporting by Brenton Cordeiro in Bangalore; Editing by Vyas Mohan)

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