Visa To Buy Visa Europe For $23.4B; Posts $1.51B Q4 Profits

UPDATE: 6:04 a.m. EST -- Visa Inc on Monday announced the acquisition of Visa Europe in a deal valued at 21.2 billion euros ($23.4 billion). The transaction also includes a 16.5 billion euro upfront consideration, which includes 11.5 billion euros of cash and preferred stock.

Visa also reported fourth-quarter profits of $1.51 billion and earnings of 62 cents per share -- slightly below analysts’ estimates of 63 cents -- but up from $1.36 billion, or 54 cents a share, in the same period last year.

Revenue for the quarter ending Sept. 30 came in at $3.6 billion, compared to the consensus estimate of $3.57 billion. This was an 11 percent increase over last year. For the full year, the company earned $6.3 billion, 16 percent over the previous fiscal year.

“Visa’s fiscal fourth quarter was a strong finish to an equally strong fiscal full-year 2015 in terms of revenue and earnings per share growth in the face of a continued challenging global economic environment,” CEO Charlie Scharf said, in a statement.

Original story:

Credit card giant Visa Inc will report its fourth quarter and full-year profits before New York markets open Monday. The company is also expected to announce whether it is going to acquire Visa Europe -- a former subsidiary that is now owned by more than 3,000 European banks.

For the quarter ending Sept. 30, the multinational financial services company is expected to report earnings of 63 cents a share on revenue of $3.57 billion, up from 55 cents a share on revenue of $3.23 billion a year earlier. For the full year, the company is expected to post revenue of $13.8 billion -- up from $12.7 billion in revenue for the fiscal year 2014.

“Visa Inc. believes there is compelling logic for both Visa Inc. and Visa Europe to consummate a business combination and therefore regularly engages in such discussions and is currently in such discussions with Visa Europe,” the U.S. company said, in a statement accompanying its third-quarter trading update in July.

“The Company is targeting to resolve these discussions by the end of October and will provide an update during the fourth quarter earnings call, if not sooner.”

Bloomberg, citing a person familiar with the matter, reported that the deal to unify the brand is valued at over $20 billion while the Wall Street Journal reported last week that the deal may be valued at nearly $22 billion.

According to Visa Europe’s 2014 annual report, the company processed over 16 billion transactions last year and reported a profit of nearly $241.3 million.

If the deal to unite the company’s global operations under one roof goes through, it is likely to boost earnings by up to 5 percent. Net income could rise to $6.4 billion for 2015, from $5.7 billion a year earlier, Bloomberg reported, citing a survey of 28 analysts.

However, the company cautioned, in its July statement, that there is no guarantee “that any transaction will be ultimately agreed or implemented.”