The US credit card issuer Visa will acquire its former European subsidiary Visa Europe for a total enterprise value that can reach up to 21.2 billion euros, according to a joint statement Monday.
The US credit card issuer Visa will acquire its former European subsidiary Visa Europe for a total enterprise value can reach up to 21.2 billion euros, according to a joint statement Monday.
The transaction, approved by the boards of directors of both companies, will occur in two stages: an initial payment of € 16.5 billion in cash and stock, with an additional payment that can go up to 4, 7 billion euros after the fourth anniversary of the closing of the transaction, the document says.
Both companies anticipate a closure by mid-2016.
Visa gave independence to its former subsidiary in 2007 shortly before his spectacular entrance to the New York Stock Exchange in 2008.
However, Visa Europe, an association owned by a group of about 3,000 European financial institutions had set up a unit (put option) forcing its former parent to buy if 80% of the members of its board supported it .
The merger will “unlock value through increased scale, the savings through the integration of both companies and the benefits associated with the transition of Visa Europe’s association status to that of lucrative business,” says statement.
Just over 18 billion transactions per year are done with Visa cards in Europe which are otherwise connected with about 500 million accounts in 38 European countries.
“The integration into a single business will guarantee us the financial strength and operational scale required to accelerate the next generation of payment in Europe,” commented the CEO of Visa Europe Nicolas Huss, said in the statement.
The group argues in particular that 37% of paying the expenses of private consumption in Europe are still made in cash or check.
“Visa Europe has reached impressive results in recent years and the Board believes that it is the perfect time to bring together these two highly lucrative businesses under common management,” said Gary Hoffman for his part, the president of Visa Europe.