THE WHAT? Payment company Square has acquired ‘buy now, pay later’ provider Afterpay in a US$29 billion deal, making it the largest takeover bid in Australian history, according to FT.com.
THE DETAILS The all-stock transaction for the Australian company will see Square CEO Jack Dorsey offer all Afterpay shareholders 0.375 shares of stock for every share owned, a rise of 30 percent from recent closing prices.
Announced via a joint statement, the transaction is expected to complete during Q2 2022, with Afterpay reporting that its board had unanimously recommended the deal to shareholders.
THE WHY? The purchase cements the boom of buy now, pay later schemes, which became increasingly popular amongst younger consumers during the pandemic.
Afterpay will be able to expand more quickly in the U.S. thanks to the acquisition, with more and more people jumping on the no credit check payment format.
Dorsey, also Twitter Co-Founder, stated, “Square and Afterpay have a shared purpose. We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles.”