Credit Agricole announces a minority stake acquisition in Worldline expanding on their exclusive strategic long-term partnership.
Crédit Agricole SA banking group and a payment services provider Worldline announced that their ongoing strategic partnership expands with an acquisition of a 7% minority stake.
The deal aims to boost the French payments company’s position as a key European payment services provider. It is a logical continuation of a partnership agreement announced last year.
In early 2023, the two parties entered into exclusive discussions to create a major player in merchant services in France. They thoroughly considered the creation of a joint company combining Crédit Agricole’s merchant acquiring footprint and distribution power with Worldline’s innovative technology and global infrastructure.
Already in July, Crédit Agricole and Worldline signed a binding agreement to create a merchant services entity for the French market. According to the two companies involved, their joint venture could become a major payment operator providing financial services to sales representatives in France.
The reports on potential minor stake acquisition first appeared in December 2023. Most media assumed that the move was an attempt of Credit Agricole to stabilize the position of its payment operations partner, which is currently experiencing difficulties. Upon the initial news, Worldline’s share price increased by almost 12%. Today, as the acquisition is officially announced, the company’s stake has already gone up by another 4%.
About a week ago, Reuters reported on a dire situation Worldline is in. According to the people with knowledge of the matter, the fintech player has been developing a defence strategy jointly with major bankers in a bid to reassure shareholders and avoid a hostile takeover following a recent share price slump. The company was reportedly weighing asset sales and bringing in an anchor investor to help support the stock.
The price slump Worldline faced is linked to the cut of its financial targets in October 2023 amid scrutiny by German regulators over money laundering controls. The situation dissolved investors’ trust and caused Worldline’s share price to more than halve (from EUR 23 to EUR 9.4).
As for Credit Agricole, the French lender said that the fresh transaction would impact its common equity Tier 1 ratio, a key metric to measure a bank’s capital against its assets, by less than 10 basis points. At the same time, it is a meaningful sign of ongoing support and mutual partnership between the two payment companies.