What happened

Shares of First Data (NYSE:FDC) popped 45.8% in January, according to data from S&P Global Market Intelligence, after the company agreed to merge with Fiserv (NASDAQ:FISV) in an all-stock transaction valued at $22 billion.

After drifting higher for the first two weeks of last month along with the broader market, First Data soared nearly 20% on Jan. 16 alone when it announced the deal.

Woman drawing larger fish eating a smaller fish

IMAGE SOURCE: GETTY IMAGES.

So what

Fiserv will technically acquire First Data, going by the terms of the agreement, giving investors 0.303 Fiserv shares for every FDC share they own in a tax-free transaction. That represented a value of $22.74 per share based on the Fiserv's closing price on Jan. 15, marking a healthy 29% premium to FDC's five-day volume-weighted average price. 

The two companies collectively pitched the combination as "highly complementary," and Fiserv CEO Jeffery Yabuki argued they will be capable of positively transforming "the manner in which people and institutions move money and information."

Check out the latest Fiserv earnings call transcript.

Now what

Fiserv and First Data anticipate revenue synergies of at least $500 million and run-rate cost synergy savings of at least $900 million in the first five years following the merger's close. Assuming all goes as planned as they work to secure the necessary regulatory and shareholder approvals, that close is currently expected to happen sometime in the second half of 2019. In the meantime, given the all-stock nature of the deal, First Data's share price will remain directly tethered to the price swings of Fiserv.