MasterCard to buy DataCash for $520 million

MasterCard Inc said it agreed to buy British payment service provider DataCash Group Plc for about £333 million ($520 million) in cash to expand its e-commerce business.                            

MasterCard, which makes money from processing credit and debit card payments on its network, said it would pay 360 pence per share, representing a 54% premium to DataCash's Wednesday close.                                           
 

"The acquisition of DataCash will expand our already significant e-commerce merchant gateway presence in Asia and Australia to European countries and other high-growth, emerging markets worldwide," MasterCard chief executive Ajay Banga said in a statement.                                        

The company expects the deal to be about 5 cents dilutive to its fourth-quarter 2010 earnings per share. It expects the transaction to be break even in 2011 and to add to earnings in 2012.         
 

The deal is expected to close by October end.                          

Shares of DataCash rose 51.6% to a 10-year high of 352 pence at 0751 GMT on the London Stock Exchange.                                           
 

MasterCard shares closed at $212.86 on Wednesday on the New York Stock Exchange.