Visa is in early discussions to reunite with its former European unit, bringing together two businesses that have operated separately for eight years, a person briefed on the matter said on Friday.
Should the talks lead to a deal, the transaction could be worth as much as $20 billion. But negotiations were at a preliminary stage and could still fall apart, the person said.
The reunion would be among the bigger deals of the year and bolster the reach of Visa, the world’s biggest payment network. The two companies separated in 2007 before Visa went public in an $18 billion initial public offering.
The former division, now known as Visa Europe, is owned by about 3,000 European banks.
Embedded in various agreements governing the split were possibilities for Visa and Visa Europe to reunite. Visa Europe has a so-called put option that would compel its former parent to again take control of the business within 285 days, or a little over nine months, once exercised.
Visa also owns a call option that would let it repurchase its onetime subsidiary if Visa Europe’s business declined past a certain point, though it has called the likelihood of those milestones “remote.”
In its most recent annual report, published late last year, Visa estimated the cost of repurchasing its former European subsidiary at more than $10 billion. Still, Visa has made no secret that it would like to reunite with Visa Europe.
Representatives for Visa and Visa Europe were not immediately available for comment.
(Published by The New York Times – May 8, 2015)