Moscow. On 2 November. The largest world payment system Visa Inc. agreed to buy Visa Europe Ltd. as part of the transaction a total value of 21.2 billion euros ($23.4 billion), according to a press release from the company.
Initial payment will amount to 16.5 billion euros. In addition, the payment “by results” (in the case of high productivity) can be up to 4.7 billion euros four years after the completion of the purchase.
The transaction, which will be a record in the history of American band, will allow to unite all international Visa transactions within a single Corporation, notes The Wall Street Journal.
Visa Europe has been carrying out activity since 2007, when preparing for the IPO, Visa Inc. approved a new business structure. The companies share a common brand, but almost independent from each other and have their own settlement systems. American company listed on the new York stock exchange (NYSE), the European – controlled more than 3 thousand banks and operates as a licensee of Visa Inc. While Visa Europe is a minority shareholder Visa Inc., which, in turn, receives from the European payment system of license payments (royalty).
In Visa Europe, based in the UK, is more than 3.7 thousand members (banks and payment services) from 36 countries, each of them has one share of the company. The Board of Directors is elected by the members and consists of 22 representatives from leading European banks. In 2014, the company received profit in the amount 219,8 million euros (+29%).
Visa Inc. – global payment system providing access to the network of electronic payments to cardholders, retail and service enterprises, financial and government institutions in more than 200 countries. The company’s market capitalization is about $192 billion.
After 2008 really big (over $10 billion) of transactions between the financial companies had very little, in the segment of payment systems did not exist, notes the WSJ.
At the moment, the largest acquisition by Visa Inc. is purchasing provider’s services for conducting secure payments in e-Commerce CyberSource for $2 billion in 2010.
Through the acquisition of Visa Europe based in California, Visa Inc. will be able to access for its markets of Turkey and Poland, with high growth rates. In addition, it will improve its position in comparison with rival MasterCard, the total network which are smaller but which has its own division in Europe.
According to the estimates of Citigroup analyst Donald Fandetti, the transaction can increase the company profits by 5%. Sanford Bernstein calculates that the profit of Visa Inc. by 2018 will grow by 12%.