The deal means more than 3,000 banks and payment companies who own Visa Europe are set to share in billions of dollars from the buyout, which could be sealed as early as next Friday.
The US card company began early-stage talks to buy Visa Europe in the second quarter, after previous attempts to reach an agreement with the banks that own it failed.
Barclays in the UK is on track to receive the biggest payout, as the bank with the largest volume of Visa Europe’s flows, amounting to about 10 per cent. The windfall for the British lender could be as much as $2bn.
Visa Inc said in its last earnings release that it “believes there is compelling logic for both Visa Inc and Visa Europe to consummate a business combination”. It confirmed at the time that the two groups were in discussion, which they were targeting to resolve “by the end of October”.
Combining forces will boost Visa Inc’s scale to compete with rival MasterCard, although Visa Europe already dominates the UK debit card market, with about 80 per cent of overall card volumes.
However, there are some concerns that the exact terms of the deal, which are not yet known, could mean banks are obliged to continue issuing Visa cards for a number of years, making it difficult for lenders to convert to other card companies.
Banks could receive a large upfront payment from the deal in cash, as well as a proportion of preferred stock with a long holding period of several years.
© Financial Times
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