The Global Payments Company logo seen displayed on a smartphone.
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Payment technology company Global Payments said on Tuesday it would buy peer Total System Services for about $21.5 billion in stock, making it the third mega deal in the industry this year.
The $119.86 per share value represents a premium of 20.3% to Total System's Thursday close, when reports of a possible deal first emerged.
Shares of Total System were up about 3 percent at $117 before the bell, while those of Global Payments were down about 1 percent.
Payment technology companies are fast consolidating to battle increased competition from banks making inroads into digital payments and fintech start-ups such as Adyen and Stripe chipping away market share.
Fidelity National Information Services agreed to buy Worldpay for about $35 billion in March, months after Fiserv announced a $22 billion takeover of First Data.
For Global Payments, it would be its second-biggest acquisition in three years. It bought Heartland Payment Systems in a $4.3 billion cash-and-stock deal in 2016.
The global payment market is set to reach $3 trillion a year in revenue by 2023 as customers opt for digital payments instead of cash, according to consulting firm McKinsey.
The combined company, which will take the name Global Payments, will be led by a 12-member board with six directors from each firm.
Global Payments Chief Executive Officer Jeff Sloan will become the CEO of the merged entity and TSYS CEO Troy Woods will become chairman.
The acquisition is expected to close in the fourth quarter of 2019, the company said.
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