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MasterCard, Visa settle Discover suit for $2.75 bln

NEW YORK
Mon Oct 27, 2008 6:51pm EDT

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NEW YORK (Reuters) - Credit card companies MasterCard Inc (MA.N) and Visa Inc (V.N) said on Monday they have reached a $2.75 billion settlement in a lawsuit brought by Discover Financial Services (DFS.N) over allegations of anti- competitive practices.

Under the settlement agreement, Visa will pay $1.89 billion and MasterCard $862.5 million, the companies said in a statement.

Morgan Stanley (MS.N), Discover's former parent company, will repay MasterCard $35 million and repay Visa $65 million, the companies said.

MasterCard said it will make the payments in November and receive the payment from Morgan Stanley in the same month. MasterCard will take a net after-tax charge of $515.5 million in the third quarter of 2008, it said.

MasterCard settled a similar lawsuit brought by American Express Co (AXP.N) in June for $1.8 billion. Visa settled that suit in November 2007 for about $2.1 billion.

(Reporting by Emily Chasan; Editing by Andre Grenon)


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