$53 billion, 28% premium: Stripe teams up with Advent for a "reverse acquisition" of PayPal, the most daring bet in payment history

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The payment industry may be about to see the largest merger and acquisition deal in recent years.

On July 15, according to Reuters citing people familiar with the matter, payment unicorn Stripe has teamed up with private equity giant Advent International to make a $53 billion acquisition offer for New York-listed payment company PayPal, with a bid of $60.50 per share, representing about a 28% premium over PayPal’s previous trading day closing price, and has already secured about $50 billion in bank financing commitments.

However, the progress of this potential deal has not been smooth. The report, citing people familiar with the matter, said that PayPal has yet to engage in substantive negotiations with the acquirers and has responded coolly to the offer. As the company is undergoing a strategic transformation, management believes the current offer lacks appeal, making it unlikely the two sides will reach an agreement in the short term.

The $53 Billion Acquisition Proposal Has Not Yet Received a Response

Stripe has previously had preliminary contact with PayPal and formally submitted an acquisition proposal this month.

In addition to the cash offer of $60.50 per share, Stripe and Advent have secured about $50 billion in bank financing commitments to support the deal. However, so far, PayPal has not commenced detailed negotiations regarding the offer.

In terms of valuation, although the offer represents a roughly 28% premium over the latest stock price, it remains below PayPal’s stock price of around $70 a year ago, and more than 80% below its all-time high in 2021.

Meanwhile, PayPal is continuing to push forward with strategic adjustments, hoping to improve profitability and growth quality. In management’s view, the company still has significant value potential to unlock, so its willingness to accept an acquisition at this stage is not strong.

Stripe Hopes to Complete Its Consumer Payment Landscape

For Stripe, the significance of this deal goes far beyond simply expanding scale. Relying on online payment infrastructure, Stripe has long established a leading edge in the enterprise payments market, but has always lacked a globally influential platform in the consumer payment field.

If the acquisition is completed, Stripe will instantly acquire PayPal’s more than 400 million active accounts, as well as mature consumer payment brands such as PayPal and Venmo, extending its business landscape from enterprise payments to the consumer payment ecosystem. The report, citing insiders, said that after the deal, Stripe and Advent plan to jointly hold PayPal.

Notably, in February this year, Stripe completed a new round of valuation through an employee stock sale transaction, raising its enterprise value to $159 billion, again making it one of the world’s highest-valued unlisted companies. Despite long-standing market expectations for an IPO, co-founder John Collison has repeatedly said that the company is not in a hurry to go public.

Against this backdrop, compared to entering the public market for financing, breaking into the consumer payment market via a major acquisition may become another way for Stripe to open up its next phase of growth.

Payment Industry Consolidation May See a Landmark Deal

If it goes through, this would become one of the largest merger and acquisition deals in the global payments industry in recent years.

More symbolically, this would be a typical case of “a new force acquiring an old giant.” Stripe, founded later and still unlisted, is aiming to acquire PayPal, a company with over 20 years of history and a massive user base, reflecting the accelerating reshaping of the competitive landscape in the global payments industry.

As a joint acquirer in this case, Advent International is also a long-term investor in the payments sector, having previously invested in companies such as Worldpay, Vantiv, Nexi, and has rich experience in industry integration.

However, since PayPal has yet to show a clear willingness to negotiate and management remains focused on business transformation, this $53 billion deal still faces considerable uncertainty before it may be finalized.

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