LONDON/NEW YORK (Reuters) – Italian payments technology firm Nexi NEXII.MI is leading negotiations to buy Nordic rival Nets in an all-stock deal worth about $10 billion after trumping competition from U.S. firm Global Payments GPN.N, four sources told Reuters.

The deal would transform Nexi, which has a market value of 8.4 billion euros ($9.93 billion), into a European payment powerhouse, allowing it to build a footprint in key regions such as the Nordics and Central and Eastern Europe.

U.S. private equity firm Hellman & Friedman, which took control of Nets in 2017 and subsequently delisted it from the Copenhagen stock exchange, is working with Credit Suisse CSGN.S on the sale and wants to clinch a deal by the end of the year, two of the sources said, speaking on condition of anonymity as the matter is confidential.

Nexi, Nets, Hellman & Friedman and Global Payments declined to comment.

Hellman & Friedman, led by boss Patrick Healy, started marketing the business during the summer, approaching U.S. firms Fiserv FISV.O and Global Payments as well as Nexi, among others, the sources said.

While Fiserv immediately dropped out, Global Payments made an all-cash proposal that would have allowed Hellman & Friedman to fully cash out of Nets, the sources said.

But earlier this week Global Payments decided to abandon the Nets deal. Around the same time, the company pulled the plug on a plan to sell its $2 billion Netspend prepaid debit card unit, as it no longer needed the proceeds to support its balance sheet, two of the sources said.

The U.S. firm announced on Thursday it was reinstating its share buyback programme, with Chief Executive Jeff Sloan telling analysts that the company’s own stock was its best investment right now.

A combination of Nexi and Nets has been blessed by U.S. private equity firms Bain Capital and Advent International, the sources said.

The pair ranks as Nexi’s top investor via holding firm Mercury UK Holdco and they also control minority shares in Nets – a business they jointly bought in 2014 and listed in 2016.

STOCK CONUNDRUM

Nexi, advised by Centerview Partners, is waiting for market volatility to ease after the U.S. presidential election on Nov. 3 before entering a binding agreement with Nets, the sources said.

“They are just waiting for the share price to pick up again as the second wave of COVID-19 has dented consumer spending, meaning payment volumes have declined,” one of the sources said.

Nexi’s shares lost about 23% in October but they’re still up 6.5% since the start of the year.

If successful, the sale would be the latest in a wave of consolidation in the payments industry, which was crowned this year by the 7.8 billion euro acquisition of Ingenico by France’s Worldline WLN.PA to create the world’s fourth-biggest payments firm.

Nexi boss Paolo Bertoluzzo sees Nets as a springboard to lucrative European markets including Denmark, Germany and Poland, the sources said.

His latest move comes as Nexi had recently embarked on another major deal in Italy to buy state-backed rival SIA – a transaction announced on Oct. 5 and expected to close by the summer of 2021.

The sources said that both deals can be executed in parallel and any takeover of Nets wouldn’t endanger the SIA transaction.

But the Nets purchase may dilute Italian state investment agency Cassa Depositi e Prestiti (CDP), which controls SIA and was meant to own a quarter of the new group, making it the single biggest shareholder, the sources said.

Hellman & Friedman, which paid 33.1 billion Danish crowns ($5.26 billion) when it bought Nets in 2017, has backed a series of strategic acquisitions to grow the company’s footprint across Europe, including the 2018 purchase of Germany’s Concardis and most recently the acquisition of Swiss firm CCV Schweiz SA.