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A PayPal Takeover by MasterCard Would 'Destroy Value,' Bernstein Says

It doesn't make much sense for either side.
relates to A PayPal Takeover by MasterCard Would 'Destroy Value,' Bernstein Says
Photographer: Andrew Harrer/Bloomberg

It's extremely unlikely that MasterCard Inc. would buy out PayPal Holdings Inc., Bernstein analyst Lisa Ellis wrote in an e-mail Tuesday amid speculation that a deal may be on the table. Bringing the competitors together wouldn't make strategic sense since the two business models are so different, she said.

"Combining them would destroy value," Ellis wrote. PayPal would have to wave goodbye to its relationships with Visa Inc. and American Express Co., which make up about 30 percent of volume. In addition, it would be forced to shut down its digital wallets, which have 170 million users. It’s also unclear how PayPal would benefit MasterCard, she said.