Private equity giant Kohlberg Kravis Roberts broke its own record for mega-deals today, agreeing to buy First Data, the credit card and payment procecessor, for $29 billion.

In equity terms, the deal trumps its legendary 1998 takeover of RJR Nabisco, which marked the arrival of private equity into modern day capitalist culture, catapulted KKR into the headlines and inspired the book Barbarians at the Gate.

KKR's $34 a share takeover of First Data represents a premium of 26 per cent to its closing share price last Friday and is 34 per cent higher than its prevailing share price over the previous 30 days. It suggests the group's management drove a hard bargain on price. It was first reported that KKR was poised to pay a premium of about 20 per cent to buy First Data.

If completed - First Data still has 50 days to try to find a rival buyer - today's deal tops last year's acquisition of Equity Office Properties by the Blackstone Group. It also supersedes last year's consortium deal to acquire hospital operator HCA for $21 billion.

Bain Capital, KKR and Merrill Lynch teamed up for HCA in what is known as a club deal.

KKR said it hoped to complete the transaction by the end of the third quarter.

The deal comes amid unprecedented scrutiny of the traditionally secret world of private equity in the UK, with union factions taking issue with what they see as ruthless asset-stripping by get-rich-quick operators.

A takeover of First Data could prove contentious in the US, where the group is central to large parts of the banking system, processing cheques, debit and credit cards payments and operating "hole in the wall" high street cash machines.

As well as demonstrating private equity's continued interest in mega-deals, a successful takeover of First Data also underscores the prevalence of cheap debt funding to back buyout bids.

Blackstone raised $16 billion of debt for Equity Office and the HCA consortium assumed debt of $11.7 billion - against debt of just $6 billion for the RJR Nabisco transaction.

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