Square to buy Afterpay for $29 billion as buy now, pay later booms



© Reuters. FILE PHOTO: A logo for the company Afterpay is seen in a store window in Sydney, Australia, July 9, 2020. REUTERS/Stephen Coates

(Reuters) – Square Inc (NYSE:) will buy Australia’s Afterpay Ltd for about $29 billion in an all-stock deal as the U.S. fintech firm looks to leverage burgeoning popularity of buy now, pay later (BNPL) credit options.

The deal will create an online payments powerhouse and help accelerate Afterpay’s growth in the key United States market as well as globally, the companies said on Monday.

Afterpay has been the bellwether of the niche online payments sector which burst into the mainstream last year as more people chose to pay in instalments for everyday items during the pandemic.

“Square and Afterpay have a shared purpose … Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers,” Square chief executive Jack Dorsey said.

Afterpay shareholders will get 0.375 shares of Square class A stock for every share they own, implying a price of about A$126.21 per share based on Square’s Friday close, the companies said.

The offer is a more than 30% premium to Afterpay’s last close and the Australian firm’s shareholders are expected to own about 18.5% of the combined company.

Afterpay’s board has unanimously recommended the deal to its shareholders, the company said in the joint statement.

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