Visa Inc. is set to clinch the biggest deal in its history—by buying a company named Visa.
The Wall Street Journal reports the California-based payments network is in advanced negotiations to buy its European counterpart—Visa Europe—for about $22bn. The deal would unite Visa’s global operations under one roof.
Visa Inc., which has held talks over the years with Visa Europe, confirmed in recent months that it was moving ahead with negotiations and would try to finish the deal by the end of October, said the Journal.
Analysts say that they expect a deal could be announced as soon as Monday when Visa releases its quarterly results.
Visa Inc., which usually reports its fiscal fourth quarter earnings in late October, won’t report results until 2 November Some speculate that the deal will be announced then.
Analysts believe the transaction will go through. “This deal has come and gone many times, but it is hard to imagine, when they have come this far, what could happen to make either side walk away,” said Lisa Ellis, a payments analyst at Sanford C. Bernstein & Co.
Large deals worth $10bn or more have been rare for financial companies since the 2008 crisis. says the WSJ, and basically unheard among of the big credit-card networks, Visa,MasterCard Inc., American Express Co., and Discover Financial Services.
Visa’s largest acquisition was its $2bn deal to buy Cybersource, a provider of security services to online merchants, in 2010.
The purchase could have widespread implications for both Visa and MasterCard in Europe, where payments systems remain relatively fragmented.
Visa Inc.’s acquisition of Visa Europe is expected to serve as a trigger for both Visa and MasterCard to push European consumers and businesses toward electronic payments, said the Journal. It would also likely invigorate the longtime rivalry between the two companies as they court the business of thousands of European financial firms that now own a majority stake of Visa Europe, according to analysts.
“It’s pretty clear that the opportunities for MasterCard should outweigh any concerns” about enhanced competition from a unified Visa, said Darrin Peller, an analyst at Barclays Capital Inc.
MasterCard already operates as a unified company around the world, and sees opportunity in a Visa change.
The proceeds from any sale would come in handy for some European banks. BarclaysPLC, the largest stakeholder in Visa Europe, stands to make more than £1 bn ($1.5 bn) in the deal, according to a person familiar with the planned transaction said the WSJ.