As of today (June 21), Visa Inc.'s acquisition of Visa Europe is officially one for the history books. The deal is done, and a new global firm serving 17,100 FIs, 40 million merchants and 3 billion card accounts worldwide has officially been born.
The deal's original terms called for Visa to pay €16.5 billion ($18.71 billion) in cash and stock, with an additional earnout of up to €4.7 billion ($5.33 billion) possible on the fourth anniversary of the deal's closing. That deal was modified while seeking approval for the deal from the European Commission. To mitigate anti-trust concerns, Visa dropped the earnout and upped the total cash in the deal to €1.75 billion ($1.98 billion) in cash.
With the arrangement now in place, Visa hopes to realize $200 million in pre-tax synergies each year through 2020 — about 30 percent of Visa Europe's operating expenses.
Visa's board has appointed Gary A. Hoffman, CEO of Hastings Group and chairman of Visa Europe, as a board member of the merged entity.
“Gary’s broad knowledge of the European payments and banking industries brings an important perspective to the Visa Inc. board and will be invaluable as we build our business in Europe," noted Visa CEO Charlie Scharf in a statement.