NEW YORK — Visa USA has announced the repurchase of over $1 billion worth of its class B shares, currently held by credit unions and banks which issue Visa, to fund an additional deposit into an escrow account set aside to cover legal expenses.
"This transaction not only adds the necessary funds to our litigation escrow, but effectively acts as a $1.1 billion Class B share repurchase program," said Joseph Saunders, Visa's chairman and CEO. "It has always been our stated intent to return excess cash to our shareholders in the form of dividends and share repurchases. We are obviously pleased that our strong financial position and excess cash flow allows us to do this."
At the time of Visa's initial public offering of stock, the company provided coverage and a payment mechanism for judgments or settlements in specific U.S. legal cases, protecting Visa and its Class A and Class C shareholders from any direct losses, the company said.
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Before becoming a public company in March, Visa set aside $3 billion to cover lawsuits. It has already spent $2.1 billion in a settlement with American Express over anti-competitive practices, and in October it agreed to pay $1.89 billion to Discover Financial Services over the next year in a similar settlement.
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