Western Union Stock: $500M Intermex Deal Sparks Skepticism

Western Union has agreed to acquire International Money Express (Intermex) for $500 million, paying $16 per share—a 72% premium to its recent closing price. The deal aims to bolster Western Union’s presence in Latin America, a historically high-growth market, and is expected to add over $0.10 to adjusted earnings per share in the first year. Management anticipates $30 million in cost savings within 24 months. However, analysts remain cautious, with some downgrading earnings forecasts amid concerns over macroeconomic headwinds and potential impacts of U.S. immigration policies on remittance flows. Western Union’s revenue has already declined nearly 4% over the past year, with 13 analysts cutting profit estimates.

Integration Risks Loom

Intermex itself faces challenges, having scrapped quarterly guidance and reduced annual forecasts due to economic uncertainty. While Western Union touts the acquisition as a strategic expansion, skepticism persists. Critics argue the company’s mid-single-digit earnings growth target is overly optimistic given volatile markets and stiff competition. The transaction, pending regulatory approval, is expected to close by mid-2026, leaving room for unforeseen hurdles. Despite the potential upside, Western Union’s stock continues to be viewed as an underperformer in the payments sector.