The price for the deal was higher than many had expected, but ended a period of strategic uncertainty that had followed Visa recently, reuters.com reports. 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 was public in 2008, leaving Visa Europe as a separate entity. The deal brings all of Visas networks under one roof again, cementing its lead over nearest-rival MasterCard Inc.
By value of payments, Visa Europe had a 52.2% share of the European card market in 2013. Visa said it would pay EUR 16.5 billion up front in cash and convertible preferred stock, with potential for an additional payment of up to EUR 4.7 billion, based on revenue targets four years after the deal closes.
More than 3,000 companies stand to profit from the deal. Barclays said in a statement that it expected an after-tax profit of about GBP 400 million (USD 619 million) in 2016, when the deal closes. The bank could receive up to EUR 1.2 billion in total, a person familiar with the matter said, the source cites.
Lloyds Banking Group Plc said it expected a pretax gain of about GBP 300 million when the deal closes, while payment services provider Worldpay Group Plc said it expected about EUR 1.25 billion from the deal, including EUR 592 million, when it closes. Visa said it was targeting savings of USD 200 million from the deal in 2020, a 30% reduction from the current run rate. Much of the savings will come from integration of technology.
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