Barclays is approaching the finalisation of a £650 million transaction with Brookfield Asset Management, marking a pivotal restructuring of its merchant acquiring operations.
Barclays advances £650m strategic divestiture
The agreement, which Barclays has found difficult to make, is expected to be formally disclosed later this month and represents a phased divestiture strategy designed to transition control while maintaining a residual stake.
Under the framework of the deal, Brookfield will acquire an initial 10% interest in Barclays’ payments unit, with a structured pathway to assume an additional 80% stake within three years.
Upon completion, Barclays will retain a minority 10% holding, reflecting a measured withdrawal rather than a full exit from the sector.
Capital Injection
Notably, as part of the arrangement, Barclays will inject £400 million into the payments division, facilitating investment in operational expansion and innovation.
Additionally, the bank will contribute approximately £250 million in regulatory capital to ensure compliance with approval requirements.
This strategic reinvestment underscores Barclays’ intent to sustain the division’s market relevance even as majority ownership shifts to Brookfield.
This transaction follows Barclays’ February 2024 disclosure of its intent to explore strategic alternatives for its payments business – one of the UK’s largest merchant acquiring operations.
Valuations for the division have ranged widely, with estimates spanning from sub-$1 billion to $2.5 billion, illustrating the complexity of assessing assets in the evolving payments sector.
Under the leadership of CEO CS Venkatakrishnan, Barclays has experienced significant financial momentum, with its market capitalisation exceeding £44 billion and share prices surging over 75% in the past year.
This performance reflects growing investor confidence in the bank’s strategic recalibration.
Although both Barclays and Brookfield have refrained from commenting on the specifics of the transaction, Barclays previously stated: “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.”
Industry sources suggest that while an official announcement could materialise as early as next week, a confirmation later in the month is more probable.
If executed as planned, this deal will significantly reshape the competitive structure of the UK payments landscape, positioning Brookfield as a dominant force in the merchant acquiring space while enabling Barclays to maintain a strategic foothold in the industry.
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