Visa In Reported Talks To Buy European Affiliate

Visa Inc V gained more than 4 percent Friday on a report that the company is in talks to acquire its affiliate Visa Europe for up to $20 billion.

Visa Europe was split off in 2007 prior to Visa's initial public offering, and operates under a licensing agreement.

Bloomberg reported Friday that Visa is in preliminary talks to acquire the business for between $15 billion and $20 billion.

Visa Europe earned $246 million in 2014 according to Bloomberg, compared with Visa's earnings of $5.44 billion.

Visa Europe is owned by more than 3,000 European banks which have a put option that would force Visa Inc. to acquire the operation.

Visa said in a recent quarterly filing that it believes there is a 40 percent chance the put option would be exercised,

As pointed out by Bloomberg, Visa estimated in it its filing that the purchase price "would likely be more than $10 billion."

San Francisco-based Visa traded recently at $69.31, up 4 percent ($2.60).