UPDATE: This story includes analysts' reactions to the proposed acquisition.
Gen Digital, which owns well-known computer and identity theft protection products, is expanding into consumer lending with a $1 billion deal to acquire the fintech MoneyLion.
Prague-based Gen — which runs Norton, LifeLock and ReputationDefender — would buy MoneyLion, whose business includes credit-building loans and an early payday offering. Pairing Gen's identity protection services with consumer lending would "power digital and financial freedom" for its customers, Gen CEO Vincent Pilette said in a news release Tuesday.
"By bringing MoneyLion into the Gen family, we're not only helping people protect what they already have, we're extending our capabilities to enable people to better manage and grow their financial wealth," Pilette said.
Dee Choubey, MoneyLion's co-founder and CEO, said pairing the companies' offerings would "create unmatched consumer value."
The deal should be a "wake-up call" for the banking industry, which needs to move beyond checking accounts, credit cards and other typical banking products, argued Ron Shevlin, chief research officer at Cornerstone Advisors.
Consumers also seek help with identity monitoring, managing their subscriptions, analyzing their debt levels and negotiating their bills, all of which impact their finances but don't traditionally live at banks, Shevlin said.
"Our financial lives are more complex than just having a checking account and making payments," Shevlin said.
Banks and credit unions have been reluctant to expand into new areas such as identity monitoring or subscription monitoring, Shevlin said, They explain their reluctance by citing the need for heavy technology spending and insisting on continuing to offer free checking accounts, he said.
In the meantime, companies outside the banking system are getting recurring subscription revenues and finding ways to offer bank-like services, Shevlin said. While MoneyLion is not a bank, it partners with banks on a checking account and debit card.
Rayna Kumar, an analyst who covers MoneyLion for Oppenheimer & Co., called the proposed acquisition a "sensible" transaction that will let MoneyLion offer its services to some 500 million subscribers of Gen products.
MoneyLion will also be able to "target relatively higher-income consumers" for its products, Kumar wrote in a note to clients. MoneyLion's core business has historically targeted borrowers looking to build or repair their credit histories.
The deal would also bring MoneyLion's 18 million customers to Gen. In an investor presentation, Gen said that would help it reach consumers in the "earlier stages of their financial lives."
The deal "adds another layer" of personal finance products to Gen's security-focused portfolio, expanding the size of the market the company operates in, Hamza Fodderwala, a Morgan Stanley analyst who covers Gen, wrote in a note to clients.
"However, we'd note this acquisition carries some level of risk," Fodderwala wrote, noting that consumer lending is outside of Gen's typical use case.
Under the deal, Gen would pay $82 a share in cash for MoneyLion, a value that comes to about $1 billion, the companies said. The transaction also includes the possibility of contingent payments for MoneyLion shareholders based on future Gen's stock performance.
The boards of both firms have approved the deal, and they expect it to close in the first half of Gen's fiscal year 2026.
The deal would also mean Gen inherits MoneyLion's battles with the Consumer Financial Protection Bureau, which in 2022
MoneyLion has
Shares in Gen were down 2% after the deal's announcement, while MoneyLion shares jumped 14%.
MoneyLion's products include a checking account run in partnership with the bank Pathward Financial; an Instacash product that gives consumers early access to their paychecks; loans aimed at helping customers build or rebuild their credit histories; and an online investment account.
The company also
