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Stone Pagamentos SA, a payment processing company partly controlled by billionaire Jorge Paulo Lemann, has agreed to acquire Brazilian card payment processing joint venture Elavon do Brasil, from Citigroup Inc (NYSE: C) and U.S. Bancorp (NYSE: USB), Reuters reported. Stone is a payments acquirer, licensed by Visa and Mastercard to accredit merchants, process and authorize credit card transactions under these and other card flags. According to Stone Pagamentos, the company is controlled by Brazilian investment firm Arpex Capital, of which Lemann is a partner, and Banco Pan SA. Lemann, whose net worth is estimated by Forbes at $31 billion, is controlling shareholder and board member of Anheuser-Busch InBev, the world’s largest beer maker, through his giant private equity firm 3G Capital. in July 2015, 3G Capital partnered with Berkshire Hathaway to complete the combination of H.J. Heinz Company and Kraft Foods Group, forming the Kraft Heinz Company, following 3G and Berkshire’s acquisition of Heinz in June 2013. Previously, in December 2014, 3G Capital completed the combination of Burger King and Tim Hortons, forming Restaurant Brands International, following 3G’s acquisition of Burger King in October 2010. Affiliates of 3G’s Partners are meaningful shareholders of AB Inbev since 1989 and Lojas Americanas since 1983. The deal ended months of negotiations to exit the money-losing company. Both U.S. lenders, which were partners in Elavon for five years, confirmed the transaction. U.S. Bancorp owns 50.9 percent of Elavon, with Citigroup holding the remainder. Stone Pagamentos agreed to replenish Elavon’s capital and provide additional funds for growth as part of the transaction, according to two sources with direct knowledge of the deal. Elavon ended last year with negative equity of 200 million reais ($56 million), leading regulators to press for a prompt capital injection. Relations between both partners soured, and a sale began to be negotiated late last year after Citigroup failed to come up with money to bolster the finances of Elavon, Brazil’s No. 4 payment processor, Reuters reported in November. Elavon failed to gain traction in Brazil’s burgeoning $250 billion payment processing market, which is dominated by Cielo SA and Rede, a unit of Itaú Unibanco Holding SA. While Cielo, Rede and peer GetNet Serviços own a combined 97 percent of the market, Elavon has less than 2 percent. Citigroup’s mounting retail banking losses and rampant competition from Cielo and other rivals thwarted Elavon’s efforts to increase market share in the local card processing market to a targeted 15 percent. Earlier in the year, Citigroup announced intentions to exit Brazil, where it has operated for more than a century. Greenhill & Co Inc advised Elavon on the deal, with Citigroup’s investment banking unit working on the bank’s side and Stone not using a financial adviser for the transaction, according to Reuters. Photo: Jorge Paulo Lemann, Co-Founder and Board Member of 3G Capital; Controlling Shareholder and Board Member of Anheuser-Busch InBev; Board Member of The Kraft Heinz Company.]]>