It looks like Visa and Visa Europe will be a single entity by the end of the month. The proposed takeover deal has cleared its last major hurdle with the announcement today that the European Commission has given the deal full regulatory approval.
The move by the EC comes following Visa making some adjustments to the terms of the acquisition in response to the Commission’s preliminary feedback. The major issue removed was a planned earn-out in exchange for an extra EUR1.75 billion in cash.
Under the original terms, Visa Inc. was set to pay an upfront consideration of ~$19.5 billion in cash and stock with the potential for an additional earn-out of up to ~$5.2 billion payable following the fourth anniversary of closing.
All in, Visa estimates the deal will be worth $200 million in pre-tax cost synergies annually through 2020, or about 30 percent of Visa Europe’s operating expenses.
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