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Slaughters and Davis Polk face off as MasterCard buys UK payments firm

Slaughter and May rubbed shoulders with Davis Polk & Wardwell in the second major announced deal this week, this time opposite the Wall Street firm on the acquisition of British payments system company VocaLink by New York-based MasterCard.

MasterCard said it will buy a 92% stake in VocaLink, for around £700m, in a bid to strengthen its presence in the UK. London-based VocaLink offers payment processing services, including the LINK cash machine network.

VocaLink was owned by several banks, including Barclays, Royal Bank of Scotland, Lloyds, Santander and HSBC, which were told by the Payments System Regulator to sell their stakes in February this year.

The FCA subsidiary said the banks’ ownership of VocaLink, which processes over 90% of salaries, more than 70% of household bills and almost all state benefits, was harming competition and innovation.

Slaughters team on the deal was led by corporate partner Rebecca Cousin with the newly-promoted Victoria MacDuff and M&A head Roland Turnill. IP and IT partner David Ives, tax partner Jeanette Zaman and head of pensions Jonathan Fenn also acted on the takeover, along with real estate partner Jane Edwarde and finance partner Azadeh Nassiri.

The Magic Circle firm already advised VocaLink in April as the company separated its LINK network of cash machines from VocaLink and renegotiated VocaLink’s processing contract with LINK and its members.

Davis Polk’s team was led by Will Pearce with executive pay advice from Jeffrey Crandall, IP and IT advice from Pritesh Shah and regulatory guidance from Angela Burgess. Tax partner Jonathan Cooklin also acting on the deal.

Similarly Davis Polk advised MasterCard last year on its $600m acquisition of cloud-based analytics firm Applied Predictive Technologies.

Hogan Lovells advised the senior executive management of VocaLink with a team led by global head of PE Tom Whelan with partners Keith Woodhouse and Nick Atkins.

MasterCard is currently facing the biggest UK legal claim ever as Quinn Emanuel Urquhart & Sullivan leads a US-style class action worth £19bn on behalf of British debit and credit card users hit with ‘illegal’ charges.

The sale of VocaLink to US owners follows Cambridge-based ARM Holdings announcing its takeover by Japanese telecoms group Softbank for £24.3bn.