US ATM manufacturer Diebold is in talks to acquire its European peer, Wincorf Nixdorf, for $1.8 billion in a move that will see the creation of a company that will be the world’s largest maker of cash machines, overtaking NCR.
PaymentEye first reported the story back in October when Diebold revealed it entered into a non-binding term sheet agreement with Nixdorf regarding a potential business combination.
Biggest ATM manufacturer in the world
The deal will see the formation of a new company, Diebold Nixdorf, that will have combined revenues of roughly $5.2 billion.
Under the terms of the agreement, Diebold will offer Wincor Nixdorf shareholders $38.98 in cash plus 0.434 Diebold common shares per Wincor Nixdorf share. Based on Diebold’s last share price before the takeover discussions began, the offer equates to €52.50 per Wincor share, or a 35 per cent premium.
The US company said it planned to raise $2.8 billion in debt to fund the transaction and refinance the existing debt of both companies.
The takeover will see the new entity, Diebold Nixdorf, have a market share of 35 per cent, surpassing the current leader, NCR, which has 25 per cent, according to Kepler Cheuvreux. However, the latter isn’t planning to sit idly by whilst a genuine rival is born: the company has recently secured $820m in funding from a private equity firm, Blackstone.
Staying relevant in a digital environment
Eckard Heidloff, CEO, Wincor Nixdorf, said the deal would leave the companies better equipped to stay relevant in the world of e-commerce and digital payment methods.
“We are convinced that our employees will benefit from being part of an even stronger, more global organization that is well positioned for the age of digitalisation,” he said.
Future of ATMs
The future of cash machines has been thrown into doubt recently, particularly after the increasing popularity of digital payment methods. However, recent innovations have showed that ATMs can evolve and stay relevant in the future of payments.
At its innovation lab in New York, Citi recently tested Diebold’s ATM that has no screen, no keypad or even a card reader. Instead, it turns the user’s smartphone into the access point. The transactions are scheduled using the screen on the consumer’s mobile device.
Along impressive examples of innovation, statistics also enforce the idea that ATMs remain highly popular. According to September figures from Link, the cash machine network, the number of ATMs in the UK reached 70,180 in July, surpassing 70,000 for the first time, showing that demand for them shows no sign of waning.
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Oh, what we wouldn't do to know the future! Like Biff and the Almanac in Back to the Future, all we need is a guide. Luckily the team over at Pivotl is on hand to give us one for the future of fintech.