ARLINGTON, Va. – A pending merger between two big players in the credit card and ATM world, Denver-based First Data Resources and Memphis, Tennessee-based Concord EFT, may take many more months to complete and may not be completed at all in its original form, according to legal experts and industry observers. First Data is the credit card processor for many of the nation's credit unions and Concord EFT is the parent company of the STAR ATM network. The resulting merger, which was first announced in mid-April has been estimated at $7 billion and would give the merged company an estimated 75% share of the market of EFT transactions which require a personal identification number. That degree of market influence was bound to attract attention from the U.S. Department's of Justice's anti-trust watchdogs and may lead to the deal, if it goes forward at all, looking a good deal different at the end that it did at the beginning, according to some, but not all, anti-trust experts. The most positive view came from David John, a banking expert with anti-trust experience at the conservative Washington D.C based Heritage Foundation. "I wouldn't say that I have seen anything that led me to think the deal might be in danger," John said. "But certainly the process has slowed and that is generally not a good sign." John noted, on the one hand, that it was not surprising that the proposed merger in what, for the Justice Department, might be a fairly unfamiliar industry might have drawn more scrutiny than another might but, on the other hand, more time for scrutiny can also lead to more doubts about the sale. He also said it was unclear that the Justice Department would necessarily care that First Data already had a majority ownership position in the New York-based NYCE network, a major player among ATM networks. This administration has not generally been too interested in blocking mergers, John pointed out. "I am taking a more wait-and-see attitude," he said. One group that had decided it had seen enough to be concerned were community bankers. The Washington D.C. based Independent Community Bankers of America cited the "dominant market share" that a company made from Concord and First Data would have and urged the Justice antitrust regulators to take market dominance carefully into account during their review. ICBA represents primarily the smaller community banks which, CEO elect Camden Fine admitted, might reasonably be more concerned about competitive options when it came time to negotiate participation in ATM networks and processing fees. But he denied that the member interest had solely driven the association's concerns. "Concern about the aggregation of financial power has long been one of the ICBA's philosophical roots," Fine said. David Schneider, General Counsel to the Houston-based Pulse EFT Association took the most negative view, noting that it was groups like the ICBA that were likely to get the Justice Department's attention in this merger and arguing that the process now had begun to work against the deal (See Sidebar). Schneider, who admitted that, as a competitor, Pulse was deeply interested in the pending merger and declined to say whether the organization had commented on it, suggested that First Data's re-filing its initial notice of the deal indicated even then that the firms might have been getting signals that it was drawing additional scrutiny. First Data announced that it was re-filing its initial notice in early May. "Any anti-trust lawyer is going to try to avoid a second request for information from the Justice Department," Schneider said, "and one way of doing that is to re-file the notice before Justice has a chance to ask you for more information." Schneider said that re-filing gets the firms another 30-day clock as well as an opportunity to try to answer some of Justice's questions before the Department asks them. "But it can be a two edged sword, because that additional time can also give Justice and other interested parties more of a chance to decide that they should be interested in your pending merger." Now that the Justice Department has filed its second request from First Data and Concord, Schneider suggested it would be difficult for the firms to complete the merger before the drop-dead date of January 31, 2004. "They can always extend it, but this kind of delay is very hard on firms," he said. Schneider, John and other experts agreed that, in the end, the Justice Department could do one of three things. It could decide it did not have a problem with the merger, could decide that it had a problem with certain parts of it, or could decide to file suit to prevent it. With the exception of John, the experts said it appeared likely that the Justice Department will approve the deal, but with significant changes that might make it much less attractive to both firms. One thing that seems sure, the experts agreed that the longer a merger process takes, the more difficult it is on the firms involved. "Its like you are in a sort of limbo," said one attorney with merger experience who declined to publicly comment on the First Data deal. "So many of the details of your day to day business life are up in the air." [email protected]