US-based financial technology group FIS said it would spin off Worldpay, the payments business it acquired for $43bn just four years ago, after a failed merger of the two companies.
The Jacksonville, Florida-based company, formally known as Fidelity National Information Services, said the tax-free split would unlock shareholder value. The claim contradicts the argument made in 2019 when it merged the group to create one of the largest providers of financial infrastructure underlying bank payment systems.
FIS’s decision to liquidate the company followed criticism by activist shareholder DE Shaw, who demanded a review of its business strategy, including considering canceling the 2019 deal.
“The pace of disruption in payments is accelerating, requiring increased investment in growth and a different capital allocation strategy for our Merchant Solutions business,” said Jeffrey Goldstein, chairman of FIS’s board of directors.
“This spin-off will create two industry-leading, publicly traded companies with a sharper focus and increased agility, each well-positioned to capitalize on significant value-creating opportunities in their respective markets.”
Charles Drucker, formerly the executive chairman of Worldpay, has been appointed as a strategic advisor to help with the spin-off and will be reinstated in his previous role once it is completed. Stephanie Ferris will continue as chief executive of FIS.
FIS shares fell more than 14 percent in pre-market trading on Monday.