Nexi's Intesa deal removes one obstacle for Italian payments tie-up

MILAN (Reuters) - Italy's Nexi NEXII.MI has finalised its acquisition of Intesa Sanpaolo's ISP.MI retailers' payments business for 1 billion euros (890 million pounds), removing a potential obstacle in ongoing merger talks between Nexi and smaller rival Sia.

Nexi and Intesa said in separate statements on Tuesday they had completed the deal after getting green lights from the Bank of Italy and the European antitrust authority.

Intesa also finalised a separate deal to buy a 9.9% stake in Nexi from its main shareholder Mercury UK HoldCo, using part of the proceeds from the sale of the retailers’ payments business.

Both transactions could potentially remove hurdles in the Nexi-Sia talks, meant to create an Italian payments giant.

Sources have told Reuters negotiations will soon focus on key valuation issues.

Mercury UK HoldCo’s stake in Nexi will fall to around 33.4% after the sale to Intesa. This could help Nexi negotiate a merger with Sia, given the smaller payments group is controlled by state lender CDP, which wants to have a key role in the combined entity, according to a source familiar with the matter.

Intesa said in a statement on Tuesday that the Nexi deal generated a net capital gain of around 1.1 billion euros for the bank in the second quarter of 2020, more than the 900 million euro gain initially expected from the deal.

Reporting by Elisa Anzolin; Editing by Mark Potter