October 11, 2018 / 6:57 AM / 2 months ago

UPDATE 1-French bank Natixis examining merging payments business with Ingenico

* Ingenico has been the subject of bid interest

* Payments sector has seen several M&A deals (Adds background and detail)

PARIS, Oct 11 (Reuters) - French bank Natixis said it was examining a merger of its payments activities with Ingenico, which has been the subject of bid interest in a sector that has witnessed several takeover deals this year.

Financial and payments firm Ingenico has a current market capitalisation of around 4 billion euros ($4.6 billion), while Natixis - which is the corporate banking arm of French bank BPCE - has a stock market value of around 18 billion euros.

"Natixis confirms having an interest in exploring the rationale of a possible industrial combination of Natixis payment activities with Ingenico Group and its businesses and having preliminary discussions in this respect," said Natixis.

Natixis added it was sticking to a "strong financial discipline" regarding any deals or investments.

Ingencio said it had received preliminary approaches for "a strategic transaction" and had initiated a review of its options.

The payments sector has witnessed a wave of takeover deals this year, including Worldline buying the payments unit of Swiss exchange operator SIX Group in May, and Nets merging with German peer Concardis in June.

As well as investing in innovation, payments companies now also need to operate on a larger scale to navigate an increasingly complex regulatory environment.

In August, people close to the matter told Reuters that private equity firm CVC had abandoned takeover talks with Ingenico, while U.S. company Danaher also failed in 2010 to buy Ingenico.

Backing from the French government is seen as key to the success of any bid for Ingenico, which France's industry minister in 2010 described as essential to the country's electronics industry.

French state bank BPI has a 5 percent stake in Ingenico.

$1 = 0.8660 euros Reporting by Sudip Kar-Gupta; Editing by Dominique Vidalon and Emelia Sithole-Matarise

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