The US Department of Justice has filed an antitrust lawsuit in a bid to block POS terminal vendor VeriFone's planned $485 million acquisition of rival Hypercom.
Having agreed to buy its smaller rival in November, last month VeriFone moved to allay competition fears by inking a deal to sell Hypercom's US business to another player, France's Ingenico.
However, the DoJ has not been appeased, filing a civil antitrust suit in the US District Court in Washington, DC, saying the acquisition would "substantially lessen competition" in the US POS market "resulting in higher prices and reduced innovation, quality, product variety, and service".
Between them, VeriFone and Hypercom together control more than 60% of the US market for POS terminals used by the largest retailers, says the DoJ.
The planned sale of Hypercom's US business to Ingenico does not resolve the antitrust concerns, says the DoJ, because the assets are to be sold to another significant player in the market and does not create a new, independent, long-term competitor.
The suit has effectively ended Ingenico's part in the deal, with VeriFone and Hypercom saying they will work the DoJ "to better understand its concerns and assess various options for the planned divestiture of Hypercom's US business, including the possibility of a divestiture to an alternative buyer."
Ingenico concedes that "considering the timeline, Ingenico anticipates that it may not be in a position to successfully close the deal".