Barclays Bank is reportedly in early discussions with Brookfield Asset Management to divest 80% of its merchant acquiring business, signaling a significant strategic shift for the UK lender. The move comes after Barclays announced in February that it was exploring sale or partnership options to rejuvenate the struggling division amid fierce competition from players like Stripe, Adyen, and Dojo.
Sky News reports that Barclays would retain a 20% stake in the business under the proposed arrangement. However, valuation challenges have complicated negotiations. The bank had previously written down the unit’s valuation by £300 million in December 2023, discouraging investors from committing to a business facing significant competitive pressures.
Further complicating matters is the recent acquisition of Barclays’ partner, Takepayments, by Global Payments, which could impact revenue streams. Brookfield, while not paying a purchase consideration, is expected to make substantial investments in modernizing products and replacing outdated payment systems to restore the unit’s competitiveness.
This isn’t Brookfield’s first foray into merchant acquiring; the Canadian asset manager gained experience through its 2023 acquisition of Network International, adding credibility to its potential stewardship of Barclays’ unit.