First Data and Concord EFS Reach Agreement With Department of Justice Allowing the Proposed Merger t

In connection with the DOJ settlement, the two companies also agreed to new financial terms, with a new value of approximately $6.9 billion, based on First Datas closing price on Friday, December 12, 2003, of $39.30. The revised merger agreement also extends the original January 31, 2004 end date to April 30, 2004 to allow sufficient time to obtain the necessary shareholder approvals of the revised terms. The revised agreement increases transaction certainty by eliminating many, but not all, conditions to completing the merger. The boards of both companies have approved the revised agreement. Upon completion of the transaction, the combined company will provide banks, merchants and their customers with more options to conveniently and securely conduct a full range of electronic payment transactions. The combined company will have approximately $10 billion in annual revenues with more than 31,000 employees worldwide. The proposed agreement with the DOJ calls for First Data to divest its 64 percent ownership of the NYCE Corporation, an electronic funds transfer network. In addition, First Data has agreed to hold NYCE as a separate unit pending the divestiture. Under terms of the new agreement with Concord, First Data will exchange 0.365 First Data common shares for every Concord common share. At Fridays (December 12, 2003), closing price of First Data stock, the transaction was valued at $14.34 for each common share of Concord. This exchange ratio represents a reduction from the original exchange ratio of 0.40 shares. To complete the transaction, First Data will issue approximately 175 million common shares to Concord shareholders. Upon completion of the transaction based on the current shares outstanding, Concord shareholders will own approximately 19 percent of the outstanding shares of the combined First Data/Concord. The exchange of shares in the merger is expected to qualify as a tax-free reorganization, allowing Concord shareholders to defer any gain on their shares for U.S. income tax purposes. The impact of the transaction in total to First Datas earnings per share depends on the timing of realizing the anticipated synergies, which is dependent on the closing date of the merger and the timing of the divestiture of NYCE. This could result in a slightly dilutive impact to the companys 2004 earnings, prior to restructuring and integration charges. It is expected to be accretive thereafter. The company expects to generate cost savings of approximately $205 million in 2006. The transaction is subject to necessary shareholder approvals. Closing is expected sometime in the first quarter of 2004.