Barclays is closing in on a £650m deal to offload control of its UK payments business to the Canadian investment giant Brookfield Asset Management after months of negotiations.
Sky News has learnt that the two companies are in the final stages of talks about a transaction that will initially see Brookfield acquiring 10% of the UK bank’s merchant acquiring division.
Three years after the deal completes, Brookfield would then acquire a further 80% of the unit, leaving Barclays as a 10% shareholder.
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Unusually, the agreement being finalised would see Barclays injecting £400m into the payments division in order to fund investment in returning it to sustainable growth, sources said on Friday.
Barclays would also provide roughly £250m of regulatory capital required to secure approval for the deal, they added.
A deal could be announced as early as next week, although it is more likely to be publicly confirmed later this month, insiders said.
The high street lender said in February 2024 that it was exploring a sale or partnership for the merchant acquiring division – one of the UK’s largest.
Estimates of the value of Barclays’ merchant acquiring arm have varied wildly, ranging from less than $1bn to $2.5bn.
The talks come with Barclays in a position of comparative strength under its chief executive, CS Venkatakrishnan.
Its shares have soared by more than 75% over the last year and now has a market capitalisation of over £44bn.
Barclays and Brookfield declined to comment, although the bank has previously said: “As we confirmed at our February [2024] investor update, we are exploring a number of options for investment in our market-leading merchant acquiring business, including strategic partnerships.
“We will provide any further updates in due course.”
