Visa's (V) - Get Report acquisition of Plaid Inc. reportedly has sparked U.S. Justice Department concern about competition, and the agency is close to deciding whether it should sue to block the deal.
Shares of San Francisco-based Visa, which is scheduled to report fourth-quarter earnings on Wednesday, at last check were down 1.5% to $190.15.
Lawyers at the Justice Department’s antitrust division who are investigating the takeover are worried that the acquisition could enable Visa to acquire a potential competitor, Bloomberg reported, citing two people familiar with the situation.
The division’s leadership hasn’t made a final decision about whether to sue.
Plaid is a data network used by many financial apps and services including Acorns, Betterment, Expensify and Venmo. Plaid, San Francisco, was founded in 2013 by Zach Perret and William Hockey.
Visa operates a network that facilitates payments between consumers and merchants around the world.
Visa in January definitively agreed to acquire Plaid for $5.3 billion. The move would give it more access to tools that connect user applications with financial accounts.
The credit card giant said it would fund the transaction from cash on hand and by issuing debt.
The two companies hoped to close the transaction within three to six months. By July, Visa said it needed more time to satisfy regulators’ concerns.
“We certainly are expecting to close by the end of the calendar year and are doing everything we can to comply with any request from the regulators that are looking at it,” Chief Executive Al Kelly told analysts on a conference call in July.