Stripe and Advent launch $53 billion bid for PayPal
The unsolicited offer would unite two of the payments industry's biggest names in one of the sector's largest proposed takeovers.
Payments company Stripe and private equity firm Advent International have jointly offered to acquire PayPal Holdings for $60.50 per share, valuing the payments giant at more than $53 billion, according to Reuters.
The offer, submitted earlier this month, is backed by approximately $50 billion in committed bank financing, one of the sources said. The proposed price represents a premium of about 28% over PayPal's closing share price on Tuesday.
The sources, who requested anonymity because the discussions are confidential, said PayPal has not yet responded to the proposal. Stripe and Advent first approached the company in early April and are seeking to advance discussions in the coming weeks. PayPal, Stripe and Advent all declined to comment.
Under the proposal, Stripe and Advent would jointly own PayPal, with each holding a 50% stake, rather than breaking up the company. The sources cautioned that there is no guarantee the approach will lead to a transaction.
Founded in the late 1990s, PayPal was one of the pioneers of digital payments but has struggled to maintain its dominance as consumers increasingly embraced alternative payment methods such as Apple Pay and Google Pay. After enjoying rapid growth during the pandemic, the company has spent the past several years grappling with slowing revenue growth and intensifying competition.
PayPal's market capitalization peaked at around $360 billion in 2021 before falling to as low as $36 billion this year. The stock has lost more than 40% of its value over the past 12 months.
After taking over as CEO in March, Enrique Lores launched a sweeping turnaround aimed at simplifying the company's structure and restoring growth. In April, PayPal reorganized its operations into three divisions focused on checkout, consumer financial services and Venmo, and payments and crypto, alongside a series of management changes.
Consolidation in payments
A deal for PayPal would rank among the largest transactions in the payments industry in recent years, underscoring a wave of consolidation as companies seek greater scale while adapting to rapid technological change and the growing impact of artificial intelligence.
Payments companies are increasingly pursuing acquisitions to expand into faster-growing areas such as cross-border and business-to-business payments, while offsetting slower growth in traditional payment processing.
Last year, Global Payments agreed to acquire rival Worldpay from FIS and private equity firm GTCR in a $24.25 billion three-way transaction. The sector has also seen a string of smaller deals, including Canadian payments company Nuvei's $2.75 billion acquisition of Israeli-founded Payoneer. Nuvei is backed by Advent International and other private equity investors.
Separately, the Financial Times reported this week that Mastercard is exploring the sale of a majority stake in its UK payments subsidiary, Vocalink, back to British banks amid concerns over critical payments infrastructure being under U.S. ownership.
PayPal's revenue rose 7% year over year to $8.35 billion in the first quarter, beating analysts' expectations of $8.05 billion. On a constant-currency basis, total payment volume increased 8% to approximately $464 billion.
In May, Lores outlined plans to use artificial intelligence to streamline operations, reduce duplication across the organization and generate approximately $1.5 billion in savings over the next two to three years, with those savings earmarked for reinvestment in future growth initiatives.
Stripe, which remains privately held, is one of the world's most valuable fintech companies. It was valued at $159 billion in a February tender offer for employees and existing shareholders, more than 70% higher than in a comparable transaction a year earlier. Headquartered in San Francisco and Dublin, Stripe provides businesses with payment processing, payouts and financial automation services.
