$53 billion, 28% Premium: Stripe and Advent Launch "Reverse Takeover" of PayPal, the Most Daring Gamble in Payments History

The payments industry may be on the verge of its largest merger in recent years.

On July 15, according to Reuters citing informed sources, payments unicorn Stripe has teamed up with private equity giant Advent International to make an acquisition offer for New York-listed payments company PayPal, with a total price of approximately $53 billion. The bid is $60.50 per share, representing a premium of about 28% over PayPal's previous closing price, and they have secured about $50 billion in bank financing commitments.

However, the potential deal is currently not progressing smoothly. The report quoted sources as saying that PayPal has not entered into substantive negotiations with the acquirers and has responded lukewarmly to the offer. As the company is amid a strategic transformation, management considers the current bid unattractive, and it is unlikely that both sides will reach an agreement in the short term.

$53 Billion Acquisition Proposal Receives No Response Yet

Stripe previously made initial contact with PayPal and formally submitted its 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 initiated in-depth negotiations over the offer.

In terms of valuation, although the offer is about a 28% premium over the latest stock price, it remains below PayPal’s stock price of about $70 a year ago, and more than 80% lower than its 2021 historical peak.

At the same time, PayPal is continuing to implement strategic adjustments, hoping to improve profitability and growth quality. In the eyes of management, the company still has substantial value to unlock, which means they are not keen to accept any acquisition at this stage.

Stripe Looks to Complete Its Consumer Payments Map

For Stripe, the significance of this deal goes far beyond simply increasing scale. For a long time, Stripe has established a leading position in the enterprise payments market thanks to its online payments infrastructure, but it has always lacked a globally influential platform in consumer payments.

If the acquisition is completed, Stripe will instantly gain access to PayPal's over 400 million active accounts, as well as well-established consumer payment brands like PayPal and Venmo, enabling it to expand its business footprint from enterprise payments into the consumer payments ecosystem. According to sources, upon completion of the deal, Stripe and Advent plan to jointly hold PayPal.

It is worth noting that in February this year, Stripe completed a new round of valuation through an employee stock transaction, raising the company's value to $159 billion, once again making it one of the world's highest-valued private companies. Although many have long expected Stripe to launch an IPO, co-founder John Collison has repeatedly stated that the company is in no rush to go public.

Against this backdrop, rather than pursuing public market financing, large-scale M&A to enter the consumer payments market may represent an alternative path for Stripe to open up the next stage of its growth.

Payments Industry Consolidation May See Landmark Deal

If ultimately realized, this would become one of the largest M&A transactions in the global payments industry in recent years.

More symbolically, this would be a classic case of a "new force acquiring an established giant." Stripe, founded much later and still a private company, is seeking to acquire PayPal, which has more than two decades of history and a massive user base—reflecting the accelerated reshaping of the global payments industry landscape.

As a joint acquirer in this deal, Advent International is a long-term investor in the payments industry, having been involved in investments in companies such as Worldpay, Vantiv, and Nexi in the past, and has extensive experience with industry consolidation.

However, with PayPal showing no clear willingness to negotiate and management still focused on business transformation, there is significant uncertainty over whether this $53 billion deal will really materialize.