Visa Inc said today it would buy former subsidiary Visa Europe in a deal valued at up to €21.2 billion, putting the company in a stronger position to compete with MasterCard.
Visa is the world's largest credit and debit card company.
It said it would pay €16.5 billion up front, with potential for an additional payment of up to €4.7 billion based on revenue targets four years after the close of the deal.
Visa Inc and Visa Europe, a co-operative of European banks with over 500 million cards, were part of a global bank-owned network until 2007.
Most of the units merged to form Visa Inc, which went public in 2008, leaving Visa Europe as a separate entity.
Barclays is the most active bank in the Visa Europe network and stands to make the most among the banks that will share the proceeds of the buyout. More than 3,000 companies are expected to profit from the deal.
Barclays could receive up to €1.2 billion in total, including upfront cash, deferred cash and payments in stock, depending on how the business and Visa Inc shares perform, a person familiar with the matter said.
Barclays said in a statement that it expected to make a post-tax profit of about £400m next year when the takeover closes, but that only reflects the upfront cash element of the deal.
Visa also reported today that its net income jumped to $1.51 billion, or 62 cents per diluted class A share, in the fourth quarter ended September 30, from $1.07 billion, or 43 cents per share, a year earlier.
Analysts on average were expecting 63 cents per share per share, according to Thomson Reuters.
