Visa, Inc. Agreed to Acquire Visa Europe For $23.4 billion

Visa, Inc. Agreed to Acquire Visa Europe For $23.4 billion

The company has finally come to a decision to acquire its long lost counterpart.

The two companies, Visa, Inc. and Visa Europe that split in up in 2007 are now again coming together. On Monday, Visa, Inc. announced that it will be officially acquiring Visa Europe for $23.4 billion or 21.2 euros. Now these two companies will be a single global company.

The split happened back in 2007 when Visa, Inc. decided to go public. The company whose headquarter is in Foster City, California, in 2007 is a combination of Visa USA, Visa Canada and Visa International. But at the time, Visa Europe become an independent company that was owned by banks and other payment providers. This acquisition has again reunited the two counterparts together.

Nicolas Huss, the Chief Executive Officer of Visa Europe said in a statement that by bringing the two companies back together and under one umbrella, they can accelerate, improve and strengthen their financial strength and operations and increase and fast-track the ‘next generation of payments throughout Europe.’

According to reports, the firm will be able to save up to $200 million in annual costs by going forward with this acquisition. 18 billion transactions are being carried out annually with over 500 million Visa credit cards in which the total amounts to $1.7 trillion, in Europe. Visa, Inc.’s Chief executive officer, Charles W. Scharf commented on this acquisition saying that they are very excited with this unification of Visa into a single global company as this acquisition is beneficial for financial institutions, card holders, vendors and other partners along with its workers and management.

The chief executive officer of Visa, Inc. had made a trip to London to make this announcement and further said that this merger will serve as a tremendous opportunity to electronify payments.

After this announcement, Visa, Inc. shares fell by about 3% to 75.22 per share while prior to Monday’s trading session Visa’s stock went up by 18% this year. Visa is expected to raise as much as $16 billion in debt as per the deal that has been signed between the two companies. This acquisition comes as a benefit for both the company but on the side lines there is another financial institution that will benefit from this deal, MasterCard Inc. MasterCard, Inc. is Visa, Inc.’s rival; after the acquisition the financial institutions will raise the pay for network transactions, and hence the company as well as the rival will benefit.

According to the reports by Visa for the fourth quarter of the current fiscal year, the quarter profit rose to $1.51 billion which was a 41% increase from $1.07 billion. Along with this, an announcement regarding a new $5 billion share repurchase program as well. The shares fell by 2.7% to $75.47 on November 2, 2015. On the other hand, the revenue for the fourth quarter rose by 11% to about $3.57 billion which exactly the amount that was estimated by the analysts.