August 04, 2011, 2:51 PM — The Department of Justice said today that in order to complete its acquisition of Hypercom, VeriFone must divest Hypercom's U.S. point-of-sale (POS) terminals business to Gores Group private equity firm.
The DOJ filed a civil antitrust lawsuit in May to block the proposed acquisition by VeriFone of Hypercom, saying the deal would greatly reduce competition in the point-of-sale (POS) market and bring higher prices and reduced innovation, quality, product variety and service.
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VeriFone and Hypercom together control more than 60% of the U.S. market for the POS terminals used by the largest retailers. They are two of only three substantial sellers of other types of POS terminals, the DOJ stated.
Shortly after the filing of the lawsuit, VeriFone and Hypercom abandoned the proposed divestiture to Ingenico and entered into settlement negotiations with the department to find an alternative buyer. Today the department filed a proposed settlement, which requires the divestiture to the alternative buyer -- Gores Group -- that, if approved by the court, would resolve the competitive concerns of the lawsuit, the DOJ stated.
"The Department of Justice's proposed remedy ensures that competition will remain in point-of-sale terminals markets," said Christine Varney, assistant attorney general in charge of the Department of Justice's Antitrust Division, in a statement. "The proposed sale of the Hypercom assets to Gores will create an independent and significant competitor in the United States, both right now and into the future."