Bank of Spain Facilitates Australia’s Largest-Ever Acquisition
BANK OF SPAIN is facilitating Australia’s biggest takeover by approving an offer for Afterpay by digital payment company Block.
While it may seem odd that a € 25 billion business transaction halfway around the world hinges on a decision made in Spain, the real reason is relatively simple.
Afterpay was established in Australia as a “buy now, pay later” business that allows in-store and online customers to purchase a product immediately and pay with four equal bi-monthly refunds without interest.
All risk passes from the supplier to Afterpay, but they charge the supplier a commission for the service and if customers do not make refunds on time, they receive a penalty.
After seeing the model work in Australia, the company quickly expanded to establish itself in the UK and parts of Europe with the creation of a new business called Clearpay in Spain following the takeover. of the Spanish fintech Pagantis in 2020.
Having received an operating license from the Spanish authorities, this allowed the company to expand into other parts of the European Union thanks to this license.
At the same time that Block (previously called Square) had taken over Spanish payment apps company Verse, Spanish authorities once again had an additional stake in the transaction.
For the acquisition of the entire operation to be carried out, it was imperative that the Bank of Spain give its consent and this was requested last December with a positive final decision announced on January 11, meaning that the operation will be finalized on February 1. .
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