MasterCard Announces Plans to Become a Publicly Traded Company

Written by CardRatings.com
Posted On: September 8, 2005

MasterCard, Incorporated recently announced plans to make major changes in their corporate structure including a new corporate governance and open ownership structure.    This will include the appointment of a new board of directors made up of independent directors and establishing a charitable foundation.    In addition, MasterCard will also begin the transition to being a publicly traded company.

With the new ownership structure and corporate administration, approximately 1,400 financial institutions, who are current MasterCard shareholders, are expected to keep a 41% equity interest in MasterCard Incorporated through their ownership of non-voting Class B common stock.    In addition, existing shareholders will be issued Class M common stock, which will give them the right to elect several directors from financial institutions around the world.

Through a public offering, MasterCard also plans to issue shares of voting Class A common stock to public investors.    After the expected completion of this offering of Class A common stocks, public investors will hold shares representing 49% of MasterCard’s equity and 83% of its voting rights.    Another 10% of the company’s equity and the remainder of its voting rights will be given to a new MasterCard charitable foundation.

MasterCard plans to use some of the net proceeds from the initial public offering to acquire Class B common stock from the present financial institution shareholders.    The completion of the new corporate administration and ownership structure is subject to shareholder approval, regulatory filings and various contingencies.

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