US digital payment platform Square, founded by Twitter boss Jack Dorsey, announced Sunday it will acquire Australia's Afterpay Limited for $29 billion.
Afterpay specializes in the "buy now, pay later" model that offers users staggered payments, often without extra charge.
The fintech application is available in Australia, the United States and Canada, as well as the United Kingdom, France and Italy. It has 100,000 suppliers worldwide and boasts 16.2 million customers.
The merger and acquisition, which is expected to close in the first quarter of 2022, will be done entirely through an exchange of shares and will value Afterpay at approximately $29 billion, according to a joint statement.
After completion of the deal, which offers a 30 percent premium on Afterpay's share price at closing Friday, shareholders will own 18.5 percent of the new company's capital.
"The acquisition aims to enable the companies to better deliver compelling financial products and services that expand access to more consumers and drive incremental revenue for merchants of all sizes," the two groups said in the statement.
"Square and Afterpay have a shared purpose. We built our business to make the financial system more fair, accessible, and inclusive," Dorsey said in the statement. He also serves as the CEO of Square, which operates the mobile payment platform Cash App.
Cash App has a user base of 70 million per year.
"Buy now, pay later has been a powerful growth tool for sellers globally," said Alyssa Henry, head of Square's Seller business, in the statement.
Square plans to integrate Afterpay's credit services into its existing Seller and Cash App units, which could allow smaller merchants to offer staggered payments at checkout as well.
For Afterpay co-founders Anthony Eisen and Nick Molna, "the transaction marks an important recognition of the Australian technology sector as homegrown innovation continues to be shared more broadly throughout the world."
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