Visa to buy Visa Europe; deal could exceed $23B
Visa (V) plans to buy Visa Europe in a deal that could be worth more than $23 billion and consolidate all operations of the global payments processor.
Visa will pay 11.5 billion euros ($12.66 billion) in cash upfront plus stock valued at about $5.5 billion. Visa Europe investors also could earn an additional payment valued at nearly $5.2 billion from Visa Inc. if certain revenue targets are met during the 16 quarters following the deal.
The company became two separate entities before Visa Inc. transformed itself into a publicly traded company. Visa Europe has operated independently of Visa Inc. since 2004.
There have been talks over the years to combine again, to better compete against smaller rival MasterCard.
Visa Europe, incorporated in the United Kingdom, is an association owned by member banks and other payment service providers. It handles more than 1.5 trillion in euro payment volumes, processes more than 18 billion transactions annually, and it works with about 3,000 financial institutions in 38 countries.
The boards of both companies support the deal, though regulators must still approve it. Visa expects the buyout to close in the third quarter of fiscal 2016.
Visa also announced a $5 billion share buyback program Monday and a fourth-quarter profit of $1.51 billion.
Visa shares slipped $1.24 to $76.34 in premarket trading Monday.