Visa Closer to IPO After SEC Ruling

Visa cleared another hurdle this week on its way to going public, receiving approval from the U.S. Securities and Exchange Commission to combine its global operations.

Visa in June filed with the SEC plans to combine its Visa Canada, Visa International and Visa USA divisions into Visa Inc. The SEC has now approved that move, giving Visa the go ahead to launch an initial public offering which analysts have estimated could occur in the first quarter of 2008. Visa now is owned by its 13,400 member banks.

The boards of the three Visa divisions have already approved the plan. Visa International’s authority covers three regional divisions—Visa Asia Pacific, Visa Latin America Caribbean and Visa Central and Eastern Europe, Middle East and Africa.

Under the plan, Visa Western Europe will remain independent and become a licensee of Visa Inc. It will control 11.7 percent of the stock of Visa Inc. following the IPO, according to Visa’s SEC filings.

Visa has reported that going public will allow it to raise funds for expansion, marketing, and continuing technical improvements and to build up a bank to address a class action law suit from U.S. merchants over the network’s interchange fees. Interchange is the industry term for the fee merchants must pay to accept cards carrying the Visa and MasterCard Inc. branded credit and debit cards.

Visa is the largest card network in the world with more than 1.6 billion cards issued and annual volume of more than $4.8 trillion.

MasterCard went public in May 2006 and its stock has skyrocketed from $40.30 to $137.25 today.