Visa to buy Visa Europe in deal worth as much as $23 billion

Mon Nov 2, 2015 2:50pm EST
 
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By Richa Naidu and Sudarshan Varadhan

(Reuters) - Visa Inc (V.N: Quote) said on Monday it would buy former subsidiary Visa Europe Ltd for up to $23.3 billion in a deal that will give the world's largest payments network a chance to cut costs over the long term and raise fees in the second-biggest card market.

The price for the long-anticipated deal was higher than many had expected, but ended a period of strategic uncertainty that had dogged Visa in recent months.

Visa Inc and Visa Europe, a cooperative of European banks with more than 500 million cards, were part of a global bank-owned network until 2007.

Most of the units merged to form Visa Inc, which went public in 2008, leaving Visa Europe as a separate entity.

The deal brings all of Visa's networks under one roof again, cementing its lead over nearest-rival MasterCard Inc (MA.N: Quote).

By value of payments, Visa Europe had a 52.2 percent share of the European card market in 2013. (bit.ly/1HVUjqe)

Visa said it would pay 16.5 billion euros up front in cash and convertible preferred stock, with potential for an additional payment of up to 4.7 billion euros based on revenue targets four years after the deal closes.

More than 3,000 companies stand to profit from the deal.   Continued...

 
A Visa logo is seen during the International CTIA WIRELESS Conference & Exposition in New Orleans, Louisiana May 9, 2012.  REUTERS/Sean Gardner