Visa Inc agrees EUR21.2 billion deal for Visa Europe

Visa Inc agrees EUR21.2 billion deal for Visa Europe

European banks are set for a windfall return on their investment in Visa Europe, as Visa Inc confirms a €21.2 billion deal for the European card network.

The transaction consists of upfront consideration of €16.5 billion in cash and stock with the potential for an additional earn-out of up to €4.7 billion payable following the fourth anniversary of closing. The deal is subject to regulatory approvals and is expected to close in Visa Inc.’s fiscal third quarter of 2016.

At the end of fiscal full-year 2015, there are more than 500 million Visa cards issued across Europe. The association is responsible for more than €1.5 trillion in payments volumes, processes over 18 billion transactions annually, and partners with approximately 3,000 financial institutions in 38 countries.

“We are very excited about unifying Visa into a single global company with unmatched scale, technology and services,” says Charles Scharf, chief executive officer, Visa Inc. “This transaction is beneficial for financial institutions, acquirers, merchants, cardholders, and other partners, as well as for our employees and shareholders.”

The owners of Visa Europe each own one share - giving them the same influence over the business - but the stakes have differential values. Barclays, for instance, is expected to reap £400 million from the initial EUR16.5 billion consideration, while Lloyds banking Group also values its stake in the hundreds of millions of pounds bracket.

Comments: (3)

A Finextra member
A Finextra member 02 November, 2015, 12:22Be the first to give this comment the thumbs up 0 likes

So the speculation begins....Message to all Visa Paddington employees. We'll now know what it's like when we call an employement agency and they don't call you back. At every de-merger, Visa Inc has reduced staff numbers by 30%. Are you all ready for the move to France as the HQ? When is the Collab closing? Are you disappointed that we were not all offered shares?

 

A Finextra member
A Finextra member 02 November, 2015, 14:22Be the first to give this comment the thumbs up 0 likes

Take the money and run. But, a few of the European banks should start their own payments company with a new global brand once their non-compete clause ends. Why pay Visa when you can pay yourself. Also, potential changes in the EU's intercange rules substantially decrease Visa's value proposition.

Peter Robinson
Peter Robinson - Liberti Consulting - Northampton 02 November, 2015, 14:35Be the first to give this comment the thumbs up 0 likes

Increased competition is what the EU are trying to achieve, it would therefore be nice to see the UK and European banks collaberating and starting their own global (or at least European wide) brand. If this deal gives existing members the freedom to challenge the status quo it can only be for the better and I wish them the best of luck.