Visa in talks over $20bn Visa Europe acquisition - Bloomberg

Visa Inc is in talks with European banks about buying back its former subsidiary Visa Europe for as much as $20 billion, according to Bloomberg.

Citing sources, Bloomberg says that talks between the two are underway but are at an early stage and could stumble over price, which is expected to be in the $15 billion to $20 billion range.

While they share the same brand, Visa Europe and Visa Inc have been separate entities since 2007, when they split ahead of the US business listing on the New York Stock Exchange. Visa Inc. has a call option to buy shares in the bank-owned European organisation, while Visa Europe's members have a put option to sell them to Visa Inc.

Europe's banks have held discussions over a possible sale of Visa Europe in the past, but have so far kept their powder dry. Visa Inc made the opening move on talks this time, says Bloomberg.

The prospect of a deal raised its head last November when Visa Inc said in an SEC filing that it may have to find $10 billion to fund an acquisition of its sister, warning that it would need to access third-party financing to meet its obligations under a 285-notice period if European banks exercised their option to sell.

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Cards Mergers and acquisitions

Comments: (4)

A Finextra member 10 May, 2015, 05:33

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0 likes The reason Visa Europe brought in the new CEO was to sell the company back to Visa Inc. when asked several times his answer was "every company is for sale and we should be proud they want to buy us". A fair comment for someone who would likely gain upwards of €50m when the sale goes though. What is amazing is this was meant to have happened during the world cup in South Africa in 2010 and then during the 2010 games in London. At that time the price was around $7billion. Clearly shows thy at visa Inc isn't very good at negotiations but Visa Europe are. On a positive note it must be sickening for Messers Mariano, Steve and Phillipe all of whom were EVPs. They were unceremoniously discarded during the reshuffle a year ago. They were waiting for that payoff. Alas what goes around, comes around. I would say that there is an 95% chance this will go ahead. The buzz in the Viaa Europe canteen is at new heights as we await stock options. Ker ching!

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A Finextra member 15 May, 2015, 10:59

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If this acquisition went ahead, merchants could be exposed to a US-style myriad of ever increasing scheme fees while Visa enjoys a constantly rising share price. I have written about the potential implications in further detail on a Finextra Blog here.

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A Finextra member 17 December, 2015, 10:11

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I agree wholeheartedly with Alistair on this one and think his Blog is spot on. I don't think this acquisition would be good for merchants in Europe at all. Time will tell I guess, but merchants should prepare themselves for Visa Scheme fee increases in the future.

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A Finextra member 17 December, 2015, 11:22

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There is a riposte that all European governments should apply to Visa Inc. before this humongous sale of around 20 Billion euros goes through and some executives at Visa will pop the Champaign cork, having won the lottery so to speak. And that is for all European governments to wake the fuck up and apply a Europe-wide regulatory regime to severely limit or completely eliminate all interchange fees on European merchants, and their flow-on effects of credit and debit card surcharges that are above the cash price in retail outlets, that all card holders will most definitely pay to merchants so that they may cover costs imposed by the likes of Visa Inc. and MasterCard on merchants everywhere.

http://www.euractiv.com/euro-finance/verschueren-lower-interchange-fe-interview-533664

https://en.wikipedia.org/wiki/Interchange_fee