The US fintech giant Square is buying Australian Stock Exchange-listed buy-now-pay-later company Afterpay for $39 billion.
For every share they own, shareholders of Afterpay will get 0.375 shares of Square class A stock. The price is expected to be around A$126.21 per share based on Square’s Friday close. Afterpay’s Board recommended the deal. 18.5% of the combined company would be owned by Australian shareholders.
Afterpay is the lead company of a burgeoning online payments sector, allowing people to pay for their purchases in installments. Square is targeting the traditional credit market based on this takeover.
“The addition of Afterpay to Cash App will strengthen our growing networks of consumers around the world while supporting consumers with flexible, responsible payment options,” said Brian Grassadonia, the lead of Square’s Cash App business.