Visa Inc, following feedback from the European Commission has been forced to change the terms of its acquisition of Visa Europe.
Under a deal struck in November, Visa Inc was set to pay an upfront consideration of €16.5 billion in cash and stock with the potential for an additional earn-out of up to €4.7 billion payable following the fourth anniversary of closing.
However, in an effort to keep the EC on-side, it has reached preliminary agreement with bank-owned Visa Europe to change the transaction details.
“Instead of an earn-out, the cash consideration payable in the transaction will be increased by €1.75 billion: €750 million payable upon closing, and €1.0 billion, plus 4% compound annual interest, payable on the third anniversary of closing,” reads a statement.
The deal is still subject to negotiation and may not now be closed by the end of the third quarter, as initially planned.