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Stripe, together with the private equity firm Advent International, is in talks regarding a potential acquisition of PayPal, according to The Wall Street Journal.
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According to available information, in July, potential buyers offered $60.50 per share for the payment system, valuing the entire business at $53 billion; however, this amount proved insufficient for PayPal to agree to the sale. The Wall Street Journal notes that prior to this offer, the payment service’s stock was trading at historic lows, and its market capitalization stood at about $40 billion – $320 billion below the peak levels recorded at the height of the COVID-19 pandemic.
Although the talks may still end without a deal, the parties are currently discussing a potential increase in the price per share and, if negotiations proceed favorably, could publicly announce an agreement within the coming weeks. In a previous report on the buyers’ proposal, Reuters noted that Stripe and Advent International would own the business in equal shares, becoming joint owners of PayPal.
The partners do not intend to split up the acquired entity, which will make Stripe one of the world’s most powerful companies in the online payments sector; according to Reuters, will process approximately $3.7 trillion in transactions annually.
In March, PayPal appointed a new CEO, Enrique Lores, who is working to stabilize and restore the company’s performance. The CEO has divided the company into three business units: one focuses on checkout mechanisms, the second oversees the Venmo service, and the third is responsible for transactions and cryptocurrency solutions.
It is currently difficult to predict how a potential acquisition would affect the new structure; however, as Reuters explained, a merger between Stripe and PayPal could reduce Stripe’s dependence on Visa and MasterCard, and would also open up the possibility for Stripe to directly integrate PayPal’s checkout system, Venmo, and related cryptocurrency tools into its own product solutions.
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