2. The Announcement
11/02/2015 the formation of a global company.
Total transaction value= 21.2 billion Euros= $23.4 billion.
“Shares fell 2.7 percent to $75.47 at 10:11 a.m”(Dexheimer, 2015)
Currently under regulatory approval
Greater access for Visa clients
Motives
Lack of income from Europe
Client database
3. The Players
The Acquirer- Visa Inc
Headquarters in California
World largest payment system
Went public in 2007
The Target- Visa Europe
Separated from Visa Inc. in 2007
Headquarters in the UK
Owned and operated by 3000
banks and other payment service
providers (investors)
Payments leader in Europe
4. Visa Europe
Operating Conditions
56.9% market share
Outperforms MasterCard (issuing cards,
volume of payments, average payments)
Unveiled Visa/ Apple pay in Europe
Partnered with Saint Martin’s college (UK)-
wearable payment devices
Financial Conditions
18 billion transaction
1.5 million Euros in revenue
263,986 euros in profit
Debt-free balance sheet
26-27% operating margin
5. Visa Inc.
Operation conditions
Multinational corporation
#238 on the fortune 500
Working with Chevron- mobile payment
Working in Africa
World most Ethical companies(Ethisphere)
Market beta of 1.021
Financial Conditions
Total revenue of 13.880 Billion (12.7 in 2014)
4.8 billion in total operating expense (4.5 in
2014)
Net income of 6.438 billion (5.7 in 2014)
Debt/equity ratio of 53.86
Operating margin of 65.68%
6. Strategies
Put option agreement of 2007- when exercised, Visa Europe would require Visa Inc.
Purchase all of Visa Europe outstanding capital stocks
The price would be determined by a formula
There would be a timetable for the purchases
Open their arms to Visa Inc.
Agreement would be reverted to original terms if the transaction is not completed.
7. Synergy and Integration Cost
Synergy
“Visa Inc. expects to reach
approximately $200 million in cost”
annually(Scott, 2015)
Better estimation will begin in 2018
Integration cost
Initial cost of $150 million in 2016
It will total $450-$500 million by 2020
$15-$16 billion in debt
8. Benefits
Visa Europe has less restriction to Visa inc. products capital,
talent, and resources
Visa Inc, gets to truly capitalize on the Europe
Cost savings and faster service for clients
Integration of knowledge
9. Reference and Additional Information
Visa Europe page
Visa INC homepage
Visa Inc. fact sheet
Dexheimer, E. (2015, November 2). Visa Agrees to Buy Visa Europe for as Much as $23.4 Billion.
Retrieved April 11, 2016, from http://www.bloomberg.com/news/articles/2015-11-02/visa-agrees-
to-buy-visa-europe-for-as-much-as-23-4-billion
Scott, A. (2015, December 11). Visa Inc: What Does Recent Visa Europe Acquisition Hold?
Retrieved April 11, 2016, from http://www.businessfinancenews.com/26729-visa-inc-what-does-
recent-visa-europe-acquisition-hold/