Stripe teamed up with private equity to bid 53 billion dollars, will PayPal be “compiled”?
Source: PANews
Author: Nancy
Original title: From the founder of the industry to the 80% drop in stock prices, PayPal was revealed or “compiled” by Stripe for 53 billion dollars
Recently, it was revealed that payment unicorn Stripe is teaming up with private equity giant Advent International to “collect” the former payment giant PayPal for 53 billion US dollars. After the news was announced, PayPal's stock price rose nearly 17.2%.
This merger and acquisition rumor, which could reshape the global payment landscape, surfaced a few months ago, but up to now, PayPal has yet to officially respond, and the two sides have yet to enter into substantive negotiations.
To buy PayPal for $53 billion, Stripe has yet to open the door to negotiations
On July 15, according to Reuters, quoting people familiar with the matter, Stripe and Advent International have jointly proposed a takeover offer to PayPal. The bid price is 60.5 US dollars per share, corresponding to a total valuation of over 53 billion US dollars. There is a certain premium over PayPal's current stock price of about 55.5 US dollars.
Although the latest valuation of Stripe, which has not yet been listed, has risen to $159 billion, which is more than three times PayPal's current market value, in the face of a super acquisition of more than 53 billion US dollars, it is still difficult to complete the transaction with its own capital alone.
According to people familiar with the matter, Stripe and Advent have received about $50 billion in bank financing commitments to provide major financial support for this acquisition. After the transaction is completed, the two parties plan to jointly hold PayPal after the transaction is completed, and each will hold 50% of the shares, rather than split sales or asset divestment of PayPal according to traditional private equity practices.
This transaction structure is not common in the fintech industry. Normally, technology companies tend to complete acquisitions independently in order to quickly integrate the business; private equity funds prefer to gain control through leveraged acquisitions, and then use asset restructuring, split sales, etc. to achieve exit and maximize profits. However, Stripe and Advent chose equal shareholding this time, not only sharing the financial pressure required for large-scale mergers and acquisitions, but also complementing the advantages of industrial resources and capital capacity.
Among them, Stripe is responsible for industry collaboration and business integration, thereby further consolidating its leading position in the online payment field. For Stripe, PayPal's biggest competitive advantage is not a single business, but rather a complete ecosystem built by consumers, merchants, and payment networks. If sold separately, it will not only weaken the network effect between consumers and merchants, but also affect brand value and limit its future development space. Therefore, for Stripe, retaining the value of the PayPal platform in its entirety is far more of a long-term strategic value than acquiring a few separate assets.
In contrast, Advent played more of a “capital bridge” in this transaction. As a world-renowned private equity fund, it has long been deeply involved in the field of fintech. It not only has rich experience in large-scale leveraged acquisitions, but is also good at enhancing corporate value through optimized operations and capital operations. According to public information, since 2008, Advent has invested more than 7.8 billion US dollars in 18 payment and fintech companies. Among them, one of the most representative examples is the completion of the privatization acquisition of Canadian fintech company Nuvei for approximately US$6.3 billion in 2024.
Therefore, this potential transaction is not a financial investment in the traditional sense; it is more like a long-term strategic integration around the global payments ecosystem.
In fact, as early as February of this year, it was reported in the market that Stripe had issued an initial takeover offer to PayPal. According to a source familiar with the matter recently, Stripe and Advent hope to push for negotiations in the next few weeks, but there is still great uncertainty about whether the deal will finally land.
As of now, PayPal has not publicly responded to this. However, according to foreign media reports in February of this year, PayPal did not begin negotiations with Stripe or any other company to sell itself at the time, and has been cooperating with investment banks over the past few months to prepare for possible aggressive investor actions or malicious takeover offers.
According to sources, this series of preparations stemmed from a sharp drop in PayPal's stock price, and the company's management feared that the shrinking market value could make it a target for external capital attacks or acquisitions.
The market also speculates that currently Stripe's offer may not be enough to persuade PayPal's board of directors and shareholders to accept the deal; it is more like an exploratory offer. Considering that large-scale mergers and acquisitions often require multiple rounds of gaming and bargaining, if Stripe hopes to finalize this acquisition, it is not unlikely that it will further raise the price in the future.
After PayPal's stock price fell 80%, Stripe is targeting more than just the payment business
If the deal is finalized, it will be one of the most influential mergers and acquisitions in the global payments industry in recent years. Not only is this a capital transaction of over 50 billion US dollars, but the competitive logic of the global payments industry is changing.
As fintech continues to evolve and AI technology accelerates its penetration into the payment scene, traditional payment giants are facing new competitive pressure, and even PayPal, the former founder of the industry, has been “abandoned” by the times.
By the close of trading on July 16, PayPal's stock price had a cumulative drop of about 82% from the all-time high of $307.5 set in September 2021. Although its consumer base, merchant network, and brand influence accumulated over many years still constitute an important moat, slowing growth, increased competition, and insufficient ability to innovate have made it difficult for PayPal to reproduce its rapid growth in the past.
However, PayPal's huge user base, mature payment network, and global brand influence make it still highly strategic. Bloomberg previously reported that many banks, financial institutions, and industry competitors have expressed interest in acquiring all or part of PayPal's business. Rumors of takeover have also driven a phased rebound in PayPal's stock price, but the capital market remains cautious about its ability to grow independently.
In the face of growth pressure, PayPal is also speeding up the pace of reform. In March of this year, after Enrique Lores officially became the CEO of PayPal, he quickly initiated a series of adjustments, including restructuring the business unit, replacing the executive team, focusing on core businesses such as Checkout, Venmo, and crypto payments, while promoting cost optimization and layoffs, and investing more resources in new growth directions such as AI.
However, for capital markets, internal reforms usually mean longer payout cycles and higher execution uncertainty. Therefore, compared to waiting for PayPal to independently complete the transformation and achieve value revaluation through strategic mergers and acquisitions, it has received more attention from the market.
For up-and-coming payments giant Stripe, the real value of PayPal is not just the payment business itself, but rather its long-standing consumer portal. Stripe has long had advantages in corporate payments and merchant services, but there are still shortcomings in the field of consumer payments. Meanwhile, PayPal has more than 430 million consumer accounts, the Venmo social payment network, and a mature digital wallet ecosystem. If the two parties complete the integration, Stripe will be able to complement consumers' payment capabilities and form a complete closed payment loop covering both the merchant side and the user side.
More importantly, this merger and acquisition could reshape the two parties' competitive positions in next-generation payment infrastructure.
In recent years, both Stripe and PayPal have continued to deploy stablecoin payments and crypto payment infrastructure. Stripe previously entered the stablecoin payment sector through the acquisition of Bridge, and recently announced a partnership with a number of companies to promote the new stablecoin OUSD. It is worth mentioning that after OUSD's alliance list was announced, some companies, such as Samsung and Dunamu, have indicated that they have not officially participated in the cooperation, causing market disputes.
In contrast, in addition to providing crypto asset trading services, the stablecoin PYUSD issued by PayPal has become the eighth largest stablecoin in the world, with a market capitalization of more than 2.8 billion US dollars.
If Stripe finally completes the acquisition of PayPal, it will simultaneously acquire issuance capabilities, payment infrastructure, digital wallet ecosystem, and merchant network resources in the stablecoin field, thereby enhancing its ability to compete with traditional payment networks such as Visa and Mastercard, as well as other digital payment platforms.
However, at present, the deal is still in its early stages, and there are still many uncertainties until it finally comes to fruition.
On the one hand, it is still unknown whether PayPal's board of directors will accept the acquisition, and differences between the two parties over valuation may also cause the transaction negotiations to break down; on the other hand, such large-scale mergers and acquisitions still have to face real challenges such as antitrust scrutiny, stability of bank financing, and the difficulty of integrating the two parties' businesses.
However, regardless of whether the deal finally comes to fruition, this potential acquisition has become the epitome of changes in the payment industry pattern, and global payment competition is entering a new phase.
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