Visa Inc. To Amend Transaction With Visa Europe; Updates 2016 Outlook

(RTTNews) - Visa Inc. (V) announced that, in response to feedback received from the European Commission, the company and Visa Europe have reached preliminary agreement to amend their transaction agreement to eliminate the earn-out portion of the transaction consideration. Instead of an earn-out, the cash consideration payable in the deal will be increased by 1.75 billion euros: 750 million euros payable upon closing, and 1.0 billion euros, plus 4% compound annual interest, payable on the third anniversary of closing.

Visa Inc. updated its financial outlook for fiscal full-year 2016. The company noted that its financial outlook for 2016 excludes any impact from the Visa Europe transaction.

The company expects annual adjusted class A common stock earnings per share growth in low double-digits on a constant dollar basis, with an expectation of about 4 percentage points of negative foreign currency impact. This now includes interest expense of about $390 million, or over 9 cents of earnings per share, which equates to almost 4 percentage points of reduced year-over-year growth.

Visa Inc. now expects annual net revenue growth to be in 7% to 8% range on a constant dollar basis, with an expectation of about 3 percentage points of negative foreign currency impact.

"The U.S. consumer remains strong, but we see weakness in China, Brazil, and oil based economies. Since we are not seeing any material improvements in economic trends, we are cautious as we head into the second half of fiscal 2016. The continued headwinds we see do not take away from the underlying growth in our business and our continued conviction in the great opportunities to grow global penetration of electronic payments for years to come," said Charlie Scharf, CEO.