Italy's Nexi close to buying UBI's merchant book following Intesa takeover

MILAN (Reuters) - Nexi NEXII.MI, Italy's largest payments group, is very close to a deal to buy UBI Banca's retailers' payments business, two sources close to the matter said on Tuesday.

FILE PHOTO: The logo of Italian payments group Nexi is pictured outside its headquarters in Milan, Italy, March 28, 2019. REUTERS/Alessandro Garofalo/File Photo

It marks a further expansion by Nexi, which on Sunday signed an agreement to buy Scandinavian rival Nets to create Europe’s largest payments group in terms of core profit, just over a month after it announced a tie-up with smaller Milan-based SIA.

The move to buy UBI's retailers' payments business comes after Nexi's purchase of Intesa Sanpaolo's ISP.MI retailers' payments business in June.

Intesa has since taken over UBI after a long takeover battle for Italy’s healthiest second-tier bank. Sources have said that UBI was an attractive target partly because it owned assets that could be spun off at a gain.

A retailers’ payment business, also known as a merchant acquiring business and also referred to as a merchant book, includes the services banks provide to allow shops to process card payments.

The UBI deal could be worth 238 million euros ($282.5 million), according to Italian broker Equita, which estimates the transaction would add 23 million euros to Nexi’s core profit.

Nexi purchased Intesa’s retailers’ payments business in a 1 billion euro deal that also handed Intesa a 10% stake in Nexi.

The agreement with Intesa allowed for the possibility for Nexi to buy other merchant books owned by Intesa, Nexi’s CEO Paolo Bertoluzzo told analysts in July, adding Nexi was interested in UBI’s merchant book.

Nexi has been riding a consolidation wave in Italy’s payments industry with its recent deals.

Bertoluzzo said on Monday that the enlarged group wanted to catch further M&A opportunities in terms of banks’ payments assets and their portfolios of merchant clients.

(This story corrects sixth paragraph to clarify deal could boost Nexi’s core profit, not UBI’s.)

Reporting by Elisa Anzolin and Valentina Za; Editing by Susan Fenton