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Argentina: US fund buys 51% of PRISMA for US$725M

 |  December 17, 2018

The sale of 51% of shares in Prisma, the company that handles Visa card payments in Argentina, has been completed as US-based Advent Investment Fund has closed a deal for US$725 million, to be distributed among the banks that own the firm.

In addition to giving up control of Prisma, the banks now have three years to divest themselves of the 49% of remaining shares. They will be betting that, with Advent as a partner, the company will be valued well over the US$1.42 billion valuation Prisma was given for this transaction.

The banks were forced to divest Prisma following an investigation by the National Commission for the Defense of the Competition (CNDC), which determined that the company had a dominant position in the payments market. Crucially, the CNDC found that Prisma dominates what is called the “acquiring” and “data processing” system through extremely low tariffs, which it compensated with high charges along the rest of the business chain. This strategy worked as a very effective barrier to entry for those who wanted to enter the procurement and processing market. Prisma is thought to account for about 70% of payment transactions involving electronic money in Argentina.

Full Content: Clarin

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