The EU said no – Vipps must submit a new merger application
Fintech
The merger between the three Nordic wallets Vipps, Mobilepay and Pivo fell on Finland. Rune Garborg expects a faster response to the new application.
The European Commission was so clear in its feedback that we had to choose between finding solutions or risking delaying progress in the merger for a long time. Then we decided to find a solution. On Friday afternoon, Rune Garborg could press the button and send off a new merger search to the European Commission.
In the Vipps building in Bjørvika in Oslo, it has been hard work since the three wallet companies received word from Brussels in mid-July that the commission had concerns related to Finland.
– This came as a surprise to us, Vipps manager Rune Garborg in an e-mail to Shifter.
In Norway and Denmark, Vipps and Mobile Pay have been the dominant players for a long time. In Finland, however, Mobilepay has approximately two million users and Pivo 1.2 million. Thus, the commission believed that the merger would create a market concentration in the wallet market that was far too high.
Got clear feedback
Thus, the new application that has just been sent in has no Finnish participation.
– The European Commission was so clear in its feedback that we had to choose between finding solutions or risking delaying progress in the merger for a long time. Then we chose to find a solution, writes .
The decision also relates to Finnish OP Bank, which owns Pivo, also leaving the merger cooperation.
– We would of course wish that Pivo and OP could continue to participate, writes Garborg.
Frustrated by the wait
Well, the merger work continues with just Vipps and Mobilepay. Bearing in mind that the Danish wallet is also the largest in Finland, and that many Finns use both apps, there is no need to increase market shares.
– Vipps must continue with Mobilepay in Denmark and Finland, and there is no change in the parties’ ambitions to create one common mobile wallet, writes Garborg.
When Shifter spoke to Rune Garborg this summer, almost exactly a year after the first application had been sent, he was clearly frustrated by the wait.
Every day without notice was for Garborg time lost in the international competition to share in the huge cake that constitutes online payments.
Now Garborg writes in the e-mail
– We feel every day that this market is characterized by global players who are positioning themselves more and more in Europe, so time is clearly important to us. This merger does not come a day late, but we have never been closer to our goal than we are now.
Expect a new answer in a month
– Can you start the process all over again?
– Fortunately not. Sending the formal application is the result of a long dialogue and hopefully marks the final phase of a longer and good dialogue with the European Commission.
– How long do you think it might take this time?
– We expect a response from the commission in about a month.
Already this summer, Rune Garborg could tell that Vipps has worked hard to prepare for a flying start when a positive merger announcement comes.
– We have laid out a very ambitious plan to have migrated all the wallets to one platform over the course of just over a year, says Garborg.
That plan continued quickly.
Ever since the merger plans became known last summer, Vipps has operated with the idea that the merged company would have 11 million users, 400,000 stores and 900 million annual transactions in one mobile wallet.
Despite the fact that Pivo and over a million users have been left out of the equation, the numbers are about the same. Vipps has 4.3 million users in Norway, while Mobilepay has 4.2 million users in Denmark and 2 million in Finland.
New ownership fraction
With Pivo and OP Bank out of the game, the ownership fraction has been recalculated. The Norwegian banks that own Vipps now get 72.2 percent, up from 65 percent, while Danske Bank’s stake increases from 25 percent to 27.8 percent.
There will be no changes at top management level, Rune Garborg will also be managed as a director in the new company. Mobilepay’s Claus Bunkenborg will become deputy managing director and Kjerstin Braathen, current chairman of Vipps and managing director of DNB, will become chairman of the new company.
Other members of the management team and the board will be made when the transaction is completed.