Jan. 13 (UPI) -- Visa said it has terminated its $5.3 billion deal to acquire financial company Plaid after the Justice Department filed an antitrust lawsuit against the merger.
The financial services behemoth announced in January of last year that it had reached the multibillion-dollar agreement to buy Plaid but the Justice Department filed the lawsuit against the move in November, accusing Visa of trying to "neutralize" the threat the other company posed to its U.S. business.
Al Kelly, chairman and chief executive officer for Visa, said in a statement Tuesday that they are confident they would have won their case in court but decided against following through with what would have been a protracted and complex litigation.
Zach Perret, co-founder and chief executive officer of Plaid, said the his company will find other ways to work with Visa.
"While Plaid and Visa would have been a great combination, we have decided to instead work with Visa as an investor and partner so we can fully focus on building the infrastructure to support fintech," Perret said.
Prosecutors with the Justice Department had filed the antitrust suit against the acquisition, arguing it was buying Plaid as it is "uniquely positioned to surmount" the "significant barriers" it had erected around its online debit monopoly.
The two companies had defended the acquisition, saying they complimented one another and weren't direct competition.
The Justice Department hailed the end of the acquisition as a victory for American consumers and small businesses.
"Now that Visa has abandoned its anti-competitive merger, Plaid and other future fintech innovators are free to develop potential alternatives to Visa's online debit services," Assistant Attorney General Makan Delrahim of the Justice Department's Antitrust Division said in a statement. "With more competition, consumers can expect lower prices and better services."