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Barclays has forged a “long-term” alliance with Brookfield Asset Management, aiming to “transform” its payment acceptance business as a standalone entity.
This business will continue to use the Barclaycard Payments brand, serving as the exclusive payment acceptance service provider for Barclays' clients for at least ten years.
The bank intends to invest nearly £400m($531.8m) into the new venture, focusing most of this capital injection within the first three years.
Under the agreed terms, after the initial three-year period of the tie-up an up to the seventh year, Brookfield may acquire an estimated 70% ownership stake in the business.
This acquisition is subject to certain conditions being met, including Barclays' full recovery of its investment.
Following the potential sale, Brookfield's initial financial incentive is expected to be converted into an additional 10% shareholding.
This could increase Brookfield's total ownership to around 80%.
Barclays plans to maintain a 20% stake in the business post-sale.
The payment acceptance business processes annual payments for a diverse range of clients, from small businesses to large domestic and international corporations.
This collaboration marks the inaugural transaction for Brookfield Financial Infrastructure Partners ("BFIP"), a division of Brookfield's private equity business that invests in digital assets.
Barclays UK Corporate Bank CEO Matt Hammerstein said: “Finding a partner to support us in transforming our payment acceptance business, in a way that will enable us both to serve our clients’ interests better and pursue a path to releasing value from the business, demonstrates clear execution of our three-year plan to become a simpler, better and more balanced bank.
“We have a leading position in the UK, but we know that our payments clients are increasingly looking for integrated connectivity, an end-to-end service and tailored technological solutions from their payments providers. Our partnership with Brookfield recognises the opportunity within our business to go beyond the foundations we have built to date.”
Brookfield vice chair and head of financial infrastructure Ron Kalifa stated:“We’re excited to draw on our deep global payments expertise to partner with Barclays and together deliver the operational transformation required to create the market leader, well-positioned to drive the growth of the UK’s digital economy with innovative and integrated payment solutions.”
In February this year, Barclays' completed the sale of its German consumer finance operations to BAWAG PSK, a subsidiary of BAWAG Group.