Major consolidation in the fintech space unfolded on Wednesday.

Fiserv and First Data Corp. announced that their boards of directors have unanimously approved a definitive merger agreement under which Fiserv will acquire First Data in an all-stock transaction. The companies said the transaction unites two premier firms to create one of the world’s leading payments and financial technology providers and an enhanced value proposition for its clients.

According to a news release, the transaction, which is expected to close during the second half of 2019, is subject to customary closing conditions and regulatory approvals, including the approval of shareholders of both companies. The transaction is not subject to any financing conditions.

Under the terms of the agreement, First Data shareholders will receive a fixed exchange ratio of 0.303 Fiserv shares for each share of First Data common stock they own, for an equity value of $22 billion. This represents $22.74 based on closing prices as of Wednesday and a premium of 29 percent to the five-day volume weighted average price as of that date.

Following the close of the transaction, Fiserv shareholders will own 57.5 percent of the combined company, and First Data shareholders will own 42.5 percent, on a fully diluted basis. The all-stock transaction is intended to be tax-free to First Data shareholders, according to the companies.

Executives highlighted this highly complementary combination will offer leading technology capabilities that enable a range of payments and financial services, including account processing and digital banking solutions; card issuer processing and network services; e-commerce; integrated payments; and the Clover cloud-based point-of-sale solution. The combined company will offer comprehensive distribution channels and have deep expertise in partnering with financial institutions, merchants and billers of all sizes, as well as software developers.

“Through this transformative combination, we expect to redefine the manner in which people and institutions move money and information,” said Jeffery Yabuki, president and chief executive officer of Fiserv.

“We admire First Data for its excellence in merchant acquiring and global issuing services, and the tremendous progress they have made under Frank’s leadership. We expect this combination to catalyze and support an enhanced value proposition for our collective clients and their customers,” Yabuki continued.

First Data chairman and chief executive officer Frank Bisignano added, “I have long admired what Fiserv has achieved over the years, and I look forward to working with the talented associates of both companies as we set a higher standard of innovation and service in the industry.

“Our goal at First Data has always been to provide our clients with the most comprehensive suite of innovative, highly-differentiated solutions and services, and I am excited by the significant value that the combination with Fiserv creates for all stakeholders,” Bisignano went on to say.

Wednesday’s announcement indicated the combined company will be led by an experienced board and leadership team that leverages the strengths and capabilities of both companies. Upon closing, the board of the combined company will consist of 10 members, six of whom will be from the board of Fiserv and four of whom will be from the board of First Data.

Upon closing, Yabuki will serve as chief executive officer and chairman of the board of directors of the combined company. Bisignano will assume the role of president and chief operating officer, and will serve as director of the board of the combined company. The combined entity will be known as Fiserv.

“We expect the combined company to retain our current investment-grade ratings based on our strong financial profile and excellent free cash flow. Together, this should provide the basis for continued disciplined capital allocation, including debt repayment and share repurchase,” Yabuki said.

“We look forward to welcoming First Data’s talented associates to Fiserv as we drive the global digitization of payments and financial technology services,” he went on to say.