- Barclays has reached a deal with Brookfield Asset Management to offload a majority stake in its British payments business, concluding a process that began in December 2023.
- Under the agreement, Barclays and Brookfield will form a standalone entity, into which Barclays will inject £400 million ($528.2 million).
- Initially, Barclays will retain 100% ownership of the entity for the first three years, but Brookfield holds the option to increase its stake to approximately 70%, contingent on specific conditions.
- One key condition includes Barclays recovering the full value of its investment, after which it expects to retain a 20% residual stake in the new payments business.
- The move is part of Barclays’ broader strategy to scale back in areas where it lacks competitive advantage, mirroring a trend among global banks.
- The payments unit processes billions of pounds in transactions annually for UK-based SMEs and corporate clients, serving as critical infrastructure for the economy.
- Barclays initially aimed to sell the unit for over £2 billion ($2.65 billion), but faced challenges due to technological complexities and market valuation pressures.
- The bank joins peers like Worldline, Nexi, and Adyen in facing market scrutiny and valuation drops in the European payments space.
- The transaction is designed to maximize long-term value, rather than yield immediate gains, and will not materially impact Barclays’ financial guidance or targets.
- Barclays said the partnership with Brookfield offers a path for continued growth and modernization of the payments platform under new majority ownership.
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