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Visa Inc Class A V

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Morningstar’s Analysis

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Visa Walks Away from Plaid

Brett Horn, CFA Senior Equity Analyst

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.

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Company Profile

Business Description

Visa is the largest payment processor in the world. In fiscal 2020, it processed almost $9 trillion in purchase transactions. Visa operates in over 200 countries and processes transactions in over 160 currencies. Its systems are capable of processing over 65,000 transactions per second.

P.O. Box 8999
San Francisco, CA, 94128-8999
T +1 650 432-3200
Sector Financial Services
Industry Credit Services
Most Recent Earnings Sep 30, 2020
Fiscal Year End Sep 30, 2021
Stock Type Cyclical
Employees 20,500