By Elena Vardon

Barclays agreed to sell a majority stake in its U.K. payments acceptance business to Brookfield Asset Management under a long-term partnership which will see the unit become a standalone entity.

The New York-headquartered investment firm will eventually be able to own 80% of what is currently the British bank's arm that handles credit and debit card transactions on behalf of companies and was formerly called the merchant acquiring business, the companies said on Thursday.

For the first three years of the partnership, Barclays will remain the sole shareholder and inject 400 million pounds ($529.6 million) in the division. After that, Brookfield will be able to buy a 70% stake in the unit over a four-year period, at a value to be determined by the market at the time and on the condition that Barclays recovers its investment. This adds on to the financial incentive Brookfield will receive for its support over the initial phase, which will convert into extra 10% stake as part of the sale.

As part of its turnaround plan to simplify its operations and boost returns, the U.K. lender has been looking for options such as partnerships for its merchant acquiring business. It has also been streamlining its operations by exiting some of its noncore businesses like its German consumer finance division, which it sold to Austrian bank Bawag earlier this year.

Barclays will keep a 20% stake in the payments business and doesn't expect this deal with Brookfield to have a material impact on its financial guidance or targets.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

April 17, 2025 04:13 ET (08:13 GMT)

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