NEW YORK (Thomson Financial) - MasterCard Inc. Wednesday forecast an
after-tax charge of $1 billion resulting from the settlement of all litigation
with American Express.
American Express had alleged that MasterCard illegally blocked its card from
the bank-issued card business in the U.S.
Under the terms of the agreement, MasterCard will pay 12 payments of $150
million on a quarterly basis, beginning in the third quarter. The payments are
contingent on the performance of American Express's global network services
unit.
The maximum nominal amount of the deal is $1.8 billion.
MasterCard said eliminating the uncertainty, time and expense of a court
case was in the best interest of its shareholders and customers.
Separately, American Express said the settlement "represents a very
satisfactory resolution" to the litigation.
Shares of MasterCard closed Tuesday at $280.37 while American Express shares
closed at $42.10.
Ryan Vlastelica
rv/rv/vj
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