Visa → Visa Europe

Visa Inc. reunited the global network by buying Visa Europe, the association owned by its 3,000 European member banks, for up to €21.2bn — €16.5bn at completion in cash and preferred shares and an earn-out of up to €4.7bn.

Reunited the global Visa network by buying the member-owned European association for up to €21.2bn including an earn-out.

Value

$23.4B

Announced

November 2015

Completed

June 2016

Sector

Payments

Deal type

acquisition

Acquirer

Visa (United States)

Target

Visa Europe (United Kingdom)

Why it mattered

When Visa listed in 2008, Europe stayed outside: Visa Europe remained a cooperative owned by the banks that issued and acquired its cards, licensing the brand from the listed company. That structure left Europe with lower fees, slower product development and a board of competitors, and left Visa Inc. without the world's second-largest card market at a moment when the EU's interchange caps were about to change European economics. The deal bought the whole region in one transaction and paid the banks — Barclays, Lloyds and the large continental issuers among them — for the membership stakes they had held at nominal value for decades.

The consideration was built for a seller that was many sellers: cash for those who wanted it, convertible preferred shares for those who wanted to stay exposed to Visa, and a €4.7bn earn-out tied to the region's revenue in the fourth year after closing, so that the price rose if the European business grew as Visa said it would.

What it left behind

A single global Visa, with European pricing that rose towards American levels over the following years and a supply of new products — tokens, click-to-pay, instant payments — that the cooperative had been slow to adopt. For the banks it was one of the larger windfalls of the decade; several used it to write up their own capital. For the fintechs that arrived afterwards it meant one counterparty for European card issuing rather than a members' club.