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

Jack Dorsey creator, co-founder, and Chairman of Twitter and co-founder & CEO of Square speaks on stage at the Bitcoin 2021 Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida.

Joe Raedle | Getty Images

Square will buy Australia’s Afterpay for about $29 billion in an all-stock deal as the U.S. fintech firm looks to leverage the 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 installments 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

Separately, Square reported a jump of more than 143% in its total net revenue for the second quarter.

The payments firm, led by Twitter boss Jack Dorsey, posted total net revenue of $4.68 billion for the quarter ended in June, compared to $1.92 billion last year.

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