European banks set for windfall from imminent Visa Europe deal -sources

By Steve Slater

LONDON, Oct (HKSE: 3366-OL.HK - news) 16 (Reuters) - Europe's banks are in line to share billions of euros from a buyout of Visa Europe by its U.S (Other OTC: UBGXF - news) . sister company Visa Inc (Xetra: A0NC7B - news) ., which is expected to be sealed in the next two weeks, sources said.

Credit card company Visa is in talks to buy Visa Europe, and proceeds would then be shared by more than 3,000 banks and payment firms who own the network.

Sources familiar with the matter said the deal was close to being agreed, with one saying it is earmarked for Oct. 23 or shortly after, once the boards formally approve a deal.

Sky News has previously reported Visa Inc.'s offer is worth $21 billion.

Britain's Barclays (LSE: BARC.L - news) could get about $2 billion from a deal, as banks will be paid based on how much business they account for on the Visa Europe network. The data are not publicly available but Barclays accounts for about 10 percent of the business, industry sources estimated.

The sources also estimated British banks account for about 40 percent of Visa Europe's card payments, so could be in line to receive about $8 billion, or more than 5 billion pounds. Much of the remaining activity is in France, Spain and Italy.

That could see major banks including Lloyds, Royal Bank of Scotland, HSBC, Santander and BNP Paribas (Xetra: 887771 - news) in line for hundreds of millions of euros each, sources said.

Visa Inc. wants to re-unite with the European arm to give it more global scale to compete with arch-rival MasterCard.

It (Other OTC: ITGL - news) said in July it was in talks to unite with Visa Europe and wanted to conclude talks on a deal by the end of October.

Visa Europe declined to comment and Visa Inc. could not immediately be reached. (Editing by Sinead Cruise)