Square, the digital payments platform led by Twitter founder Mr. Jack Dorsey, has agreed to acquire Afterpay, Australian buy now, pay later company, in an all-stock deal valued at about $29 billion.
The merger and acquisition, which is expected to close in the first quarter of 2022, will be done entirely through an exchange of shares and will value Afterpay at approximately $29 billion, according to a joint statement by the companies.
Last day Square stated that it has agreed to buy all of the Australian company’s shares and that the transaction’s estimated value is based on last Friday’s closing price of Square common stock.
Afterpay specializes in the “buy now, pay later” model that offers users staggered payments, often without extra charge. The app is available in Australia, the US and Canada, as well as the UK, France and Italy. It has 100,000 suppliers worldwide and boasts 16.2 million customers.
San Francisco-based Square, which processes credit card transactions through devices that plug into mobile gadgets like tablets or smartphones, said it aims to broaden access to more consumers with this acquisition.
“The acquisition aims to enable the companies to better deliver compelling financial products and services that expand access to more consumers and drive incremental revenue for merchants of all sizes,” the two groups said in the statement.
“Square and Afterpay have a shared purpose. We built our business to make the financial system more fair, accessible, and inclusive. Together, we can better connect our cash app and seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.”
Square plans to integrate Afterpay into its services, enabling merchants to offer customers the option to pay for goods later without relying on a credit card. Afterpay users would be able to manage their installment payments directly in Square’s cash app.
The US-based digital payment company recently set up its banking operations, including checking and savings accounts for small businesses and offers loans. The addition of Afterpay also gives the platform a chance to expand into consumer lending, which it does not currently offer.
Related: Visa to acquire UK-based fintech platform Currencycloud for $963mn