Visa agreed to acquire Visa Europe in a cash and stock deal worth approximately €21.2 billion to create a single global company.

In a statement, Visa CEO Charles Scharf said, “We are very excited about unifying Visa into a single global company with unmatched scale, technology and services. This transaction is beneficial to financial institutions, acquirers, merchants, cardholders, and other partners, as well as for our employees and shareholders.”

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Terms of the deal

According to Visa, the acquisition transaction is comprised of an upfront payment of €16.5 billion composed of €11.5 billion of cash and €5 billion worth of preferred stock convertible into Class A common stock of Visa.

The credit card company said an additional earn-out of up to €4.7 billion will be payable after the fourth anniversary of the closing of the transaction.

The board of directors of Visa and Visa Europe unanimously approve the deal, which is subject to customary closing conditions and regulatory approvals. Visa expected to close the transaction in the third quarter of 2016.

European clients will have greater access to Visa

According to Visa, the transaction will provide European clients with greater access to the company’s scale and resources, and they will also have direct access to its investments in innovative technology and differentiated products and services. The deal will also provide a more seamless experience to its global clients.

Visa Europe is the payments leader in the region. It is an association managed and operated by member banks and other payment service provider in Europe.Visa Europe is responsible for more than €1.5 trillion in payments volumes, processes over 18 billion transactions annually, and partners with approximately 3,000 financial institutions in 38 countries.

Visa Europe Chairman Gary Hoffman said, “The deal will unlock significant value for members both through the consideration paid and because the Board believes a combined Visa will be better positioned to serve the needs of customers going forward.”

Visa Europe CEO Nicolas Huss added, “Integrating into one global business will ensure we have the financial strength and operational scale necessary to accelerate the next generation of payments throughout Europe. This will enable us to deliver world-class solutions to our clients and open up exciting professional opportunities for our employees.”

Under the transaction, the combined businesses are positioned to take advantage of a significant growth opportunity. Thirty-seven percent (37%) of personal consumption expenditures (estimated to be around $3.3 trillion) are still conducted through cash and checks in Europe.