January 30, 2006, 12:00 AM

First Data plans to spin off Western Union unit

First Data Corp. is converting its Western Union consumer payments business into an independent publicly traded company through a tax-free spin-off of 100% of Western Union to First Data shareholders, the company announced yesterday.

Kurt Peters

Executive Editor

First Data Corp. is converting its Western Union consumer payments business into an independent publicly traded company through a tax-free spin-off of 100% of Western Union to First Data shareholders, the company announced yesterday. First Data expects to complete the transaction in the second half of this year.

The independent Western Union company will include Western Union, Orlandi Valuta and the recently acquired Vigo business. The business will be lead by Christina Gold, who will become chief executive officer.

First Data will retain its domestic card issuing business, and will organize its businesses in three primary segments: First Data Financial Institution Services, First Data Commercial Services and First Data International.

Western Union, which handles more than 275 million money transfers each year through 271,000 agent locations in 200 countries and territories, offers online retailers a pay-by-cash option that allows shoppers to choose cash payment, then make the payment at a Western Union office, which then reports the payment to the retailer so the retailer can ship the merchandise. It had revenue and operating profit of about $4 billion and $1.3 billion, respectively, in 2005.

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