Analyst Note
| Brett Horn, CFA |Visa announced that it has terminated its proposed merger with Plaid, by mutual agreement. This comes after the Department of Justice filed an antitrust lawsuit to stop the merger. We struggle to see valid antitrust concerns arising from the merger, and management noted that they believe they would have ultimately prevailed if they decided to move forward. However, given the wide moat that surrounds Visa’s existing business, we think walking away is the wisest course, to avoid creating any ill will with the government. We don’t think the $5 billion deal is material relative to Visa’s current market capitalization, and any possible benefits from adding Plaid’s capabilities could not justify potentially increasing regulatory risks or oversight to the existing business, in our view. We will maintain our $194 fair value estimate.