Piraeus Bank’s Sale of Merchant Acquiring Business to Euronet Worldwide
Lambadarios Law Firm has advised Piraeus Bank (a subsidiary of Piraeus Financial Holdings SA) on the successful completion of its €300 million sale of its merchant acquiring unit to Euronet Worldwide, in addition to the formation of a long-term partnership between the two organisations.
The transaction, encompassing both the separation and sale of Piraeus Bank’s merchant acquiring business unit and the formation of the sales and distribution partnership between the Bank and Euronet, was the first of its kind in the Greek market. Euronet Worldwide will act as Piraeus Bank’s long-term partner for the provision of merchant acquiring services to Piraeus Bank customers. The total value of the transaction amounted to €300 million.
Piraeus Bank and Euronet Worldwide established a cooperative relationship in 2000 in relation to card processing services. Within the new partnership, the parties expect to provide significant value to existing and future customers in Greece, utilising the technological capabilities and the leading knowledge of Euronet Worldwide as an international payment provider which ensures state of the art products and services in the field of merchant acquiring.
Lambadarios Law Firm acted as local legal advisors to Piraeus Bank with a team of partners led by managing partner Constantinos Lambadarios and corporate MA partner Melina Katsimi. UBS AG London Branch, PricewaterhouseCoopers Business Solutions SA and Akin Gump Strauss Hauer & Feld LLP also advised Piraeus Bank.
Lawyer Monthly had the pleasure to speak with Constantinos Lambadarios, Partner at Lambadarios Law Firm to give us some further insight into this transaction:
Please tell us more about the role your team played in the transaction as local advisers to Piraeus Bank.
Our team advised Piraeus Bank on the sale of its merchant acquiring business to Euronet Worldwide and the establishment of a long-term sales and distribution partnership between the two entities. The transaction took place by means of a spin-off of the merchant acquiring unit of Piraeus Bank to a newly established entity and the subsequent sale and transfer of 100% of the share capital of this entity to Euronet Worldwide.
Our firm assisted Piraeus Bank during the negotiation process for the preparation of the transaction documents all the way to the closing of the transaction. We also supported the team on legal issues related to the issuance of the payment institution licence and all required regulatory consents under the name of the newly established entity by the Bank of Greece. Finally, we undertook the completion of the spin-off process of the merchant acquiring unit, which was an essential condition for the completion of the transaction.
What skills did your team bring to bear as part of the transaction?
The main advantage that the LLF MA team brought to the transaction was that we had already completed a number of similar transactions with the Bank of Greece and our deep knowledge of PSD2 and the related regulatory framework around payment institutions proved very useful to the transaction teams. We also brought to the transaction a very detailed understanding of L. 4601 related to corporate transformations, which was used for the implementation of the spin-off. We had also recently implemented a number of similar transactions for the Public Gas Corporation.
Did you encounter any challenges during the process?
A significant challenge was the numerous contractual agreements which had to be agreed and signed between parties in order to ensure the smooth continuation of the long-term partnership between Piraeus Bank and Euronet following the completion of the transaction. These agreements were significantly more complex than standard template documents as they had to be drafted from scratch, since there was no precedent in our jurisdiction with a similar case in the past. This was the first of its kind and key documents had to be drafted with innovation, a high level of sophistication as the merchant acquiring sector is quite complex, and speed, as the transaction had to close at a specific date.
Another challenge was the strict time frame for the satisfaction of several conditions which were required for the completion of the project, requiring hard work and devotion throughout the interim period starting from the signing of the sale and purchase agreement in March 2021 and ending upon the completion of the transaction one year later. It should also be noted that for legal and operational reasons, the spin-off of the merchant acquiring business – which was a prerequisite for the completion of the transaction – had to be completed on the exact date of closing.
How were these obstacles overcome?
These obstacles were overcome by providing objective and balanced advice and support to a top-notch Piraeus Bank transactional team, but also by coordinating with the very knowledgeable Euronet Worldwide commercial team and their excellent team advisors and by closely monitoring the process for the satisfaction of the closing conditions. Constant communication with the supervising competent authorities played also an important role in achieving all required regulatory consents.
In what sense does this deal reflect the character of your firm?
Our firm is focused on ensuring the conclusion of the most complex deals in commercially beneficial ways for our clients by overcoming the challenges with swift and sensible solutions.
“Experts in Law: Fluent in Business” is our motto and this approach was clearly reflected in this particular transaction.
What impact do you expect the deal and partnership between Piraeus Bank and Euronet to have on the two organisations, and on the payments market overall?
By this partnership, Piraeus Bank will be backed by the technological capabilities and expertise of an international payments provider like Euronet Worldwide and shall ensure that the future is in the hands of the people that know payment services. At the same time, Euronet Worldwide, by acquiring the merchant acquiring platform of Piraeus Bank, has acquired the largest merchant acquiring business in Greece and has secured cooperation with the largest bank in our jurisdiction, completing the first transaction of its kind. The market has now opened and there are three transactions pending which are identical to this one. NBG, Eurobank and Alpha Bank have all signed similar deals that will close in the coming months with EVO, Worldline and Nexi respectively. The market will be very different with the entry of four major international players 12 months from today.