The payments company Visa (V -0.52%) and the fintech start-up Plaid have announced that they will no longer pursue a merger, ending a bid that began almost exactly one year ago.
Last January, Visa announced its plan to acquire Plaid, a network that enables people to easily and securely connect their bank accounts to various apps, in a deal valued at $5.3 billion.
Visa had planned to use Plaid to enhance its role in fintech development. In doing so, Visa planned to also expand its total addressable market and improve its cross-border strategy with Plaid's ability to quickly connect and authenticate bank accounts.
However, the deal ran into trouble from the Department of Justice, which sued Visa in a civil antitrust lawsuit in November, claiming that Visa is a "monopolist," and that Plaid would have challenged Visa's monopoly.
"We are confident we would have prevailed in court as Plaid's capabilities are complementary to Visa's, not competitive," Al Kelly, chairman and CEO of Visa, said in a statement following termination of the deal.
However, said Kelly, Visa chose to ultimately abandon the deal because it had already been a full year, and because "protracted and complex litigation will likely take substantial time to fully resolve."
Zach Perret, CEO and co-founder of Plaid, said in the statement that Visa would continue to be an investor and partner as the company continues to build out solutions to support fintech. Perret also said the company saw an increase in demand for its solutions in 2020.
Shares of Visa initially declined in after-hours trading on Tuesday.