- US fintech giant Square Inc offers to buy Afterpay (APT) for $39 billion in the biggest corporate transaction in Australian history
- Under the deal, Afterpay founder Anthony Eisen and Nick Molnar will join Square, which is owned by Twitter founder Jack Dorsey
- Square will give Afterpay shareholders 0.375 Square shares for every Afterpay share held as part of the deal, valuing Afterpay shares at A$126.21 each
- Afterpay's board unanimously recommends shareholders vote in favour of the takeover deal, which is slated for completion in the first quarter of 2022
- Afterpay shares are up 26.45 per cent and trading at $122.23 each at 10:18 am AEST
US fintech giant Square Inc has offered to buy Australian buy now, pay later (BNPL) darling Afterpay (APT) for $39 billion in the biggest corporate transaction in Australian history.
Afterpay announced the deal to shareholders this morning, with founders Anthony Eisen and Nick Molnar to join Square — which is owned by Twitter founder Jack Dorsey — once the deal is finalised.
Afterpay's founders flagged plans for a potential US listing back in April but this week said the company is "fully aligned" with Square's purpose.
"By combining with Square, we will further accelerate our growth in the US and globally, offer access to a new category of in-person merchants, and provide a broader platform of new and valuable capabilities and services to our merchants and consumers," Mr Eisen and Mr Molnar said.
Under the takeover deal, Square will integrate Afterpay into its Seller and Cash App fintech platforms.
Mr Dorsey said the combined business will create a more compelling service for both merchants and consumers.
"Square and Afterpay have a shared purpose," he said.
"We built out business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles."
Australia's biggest corporate deal
Under the terms of the deal, Square, which trades on the New York Stock Exchange, will give Afterpay shareholders 0.375 Square shares for every one Afterpay share held.
At Square's last closing price of US$247.26 (A$336.78) per share, this offer values Afterpay at A$126.21 per share — or US$29 billion (A$39 billion).
This offer represents a neat 30.6 per cent premium to Afterpay's last closing price of $96.66.
Square has the option to pay for one per cent of the total purchase in cash.
If the deal is successful, Square will establish a secondary listing on the ASX to allow Australian shareholders to continue trading shares in the new combined business.
Afterpay's board has unanimously recommended that shareholders vote in favour of the takeover deal, which is slated for completion in the first quarter of 2022.
Afterpay has pioneered the BNPL sector in Australia and around the world since being founded in 2014. The company listed on the ASX in 2016.
As of June 31, 2021, Afterpay had more than 16 million consumers around the world using its services to purchase goods and services from almost 100,000 merchants.
Meanwhile, Square has a customer base of over 70 million consumers.
Afterpay shares were up 26.45 per cent and trading at $122.23 each at 10:18 am AEST. The company has a $28 billion market cap.