Global card network, Visa Inc. has confirmed it is in talks about buying back its former subsidiary Visa Europe with a decision on whether to move ahead with the deal expected by October. The confirmation came as Visa reported its second quarter results with text saying it believes there is “compelling logic” for it to “consummate a business combination” with Visa Europe.
Since 2007, Visa Europe and Visa Inc. have been separate entities but in the following years rumors have persisted that Visa would acquire Visa Europe given that the company has a call option to buy shares in the bank-owned European organization. Bloomberg citing multiple sources in May 2015 suggested that a price for the acquisition would be between $15 billion to $20 billion.
While the move could eventually fall apart, it would appear there is growing momentum for the acquisition which would allow Visa to capitalize on the dynamic European payments space and to use its combined resources to confront new payment business models that potentially threaten the dominance of the historical card network rails.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator advisory Group
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