Barclays is in the final stages of securing a £650m deal with Canadian investment giant Brookfield Asset Management to transfer control of its UK payments business. Sky News has reported that the negotiations between the two companies have been ongoing for months, and the transaction will initially involve Brookfield acquiring 10% of Barclays’ merchant acquiring division.
After three years, Brookfield is expected to acquire an additional 80% of the unit, leaving Barclays with a 10% stake. The agreement being finalized includes Barclays injecting £400m into the payments division to support its growth and sustainability. Additionally, Barclays will provide around £250m of regulatory capital to meet the requirements for the deal approval.
An official announcement of the deal could be made as early as next week, although it is more likely to be confirmed later in the month. Barclays had announced in February 2024 that it was considering a sale or partnership for its merchant acquiring division, one of the largest in the UK. Estimates of the division’s value have varied significantly, ranging from less than $1bn to $2.5bn.
The negotiations between Barclays and Brookfield are taking place at a time when Barclays is in a strong position under its chief executive, CS Venkatakrishnan. The bank’s shares have seen a significant increase of over 75% in the last year, with a market capitalization now exceeding £44bn.
Barclays and Brookfield have refrained from commenting on the deal, but Barclays had previously stated that they are exploring various investment options for their merchant acquiring business, including strategic partnerships. Any further updates on the progress of the deal will be provided in due course.
In conclusion, Barclays is on the verge of finalizing a major deal with Brookfield Asset Management that will significantly impact its UK payments business. The injection of funds and the acquisition of majority control by Brookfield signify a strategic move for both companies in the evolving landscape of financial services. Stay tuned for more updates on this developing story. Keep the exact anchor texts of the links on
Barclays is closing in on a £650m deal to offload control of its UK payments business to the Canadian investment giant Brookfield Asset Management after months of negotiations.
Sky News has learnt that the two companies are in the final stages of talks about a transaction that will initially see Brookfield acquiring 10% of the UK bank’s merchant acquiring division.
Three years after the deal completes, Brookfield would then acquire a further 80% of the unit, leaving Barclays as a 10% shareholder.
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Unusually, the agreement being finalised would see Barclays injecting £400m into the payments division in order to fund investment in returning it to sustainable growth, sources said on Friday.
Barclays would also provide roughly £250m of regulatory capital required to secure approval for the deal, they added.
A deal could be announced as early as next week, although it is more likely to be publicly confirmed later this month, insiders said.
The high street lender said in February 2024 that it was exploring a sale or partnership for the merchant acquiring division – one of the UK’s largest.
Estimates of the value of Barclays’ merchant acquiring arm have varied wildly, ranging from less than $1bn to $2.5bn.
The talks come with Barclays in a position of comparative strength under its chief executive, CS Venkatakrishnan.
Its shares have soared by more than 75% over the last year and now has a market capitalisation of over £44bn.
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Barclays and Brookfield declined to comment, although the bank has previously said: «As we confirmed at our February [2024] investor update, we are exploring a number of options for investment in our market-leading merchant acquiring business, including strategic partnerships.
«We will provide any further updates in due course.»
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