Credit Agricole announced on Monday that it has acquired a 7% stake in payments company Worldline. This move is part of their plans to launch a joint venture payments processing company that aims to become a major player in France’s financial services sector.
The French bank’s decision to buy a minority stake in Worldline is seen as a strategic move to strengthen their partnership as they continue to work towards launching their joint venture later this year.
This acquisition comes after reports from Reuters last Friday revealed that Worldline was reviewing strategies from banks at Morgan Stanley and Rothschild & Co. These strategies were created to defend the company against a possible hostile takeover, as some parties were looking to take advantage of its recent share price slump.
Shares in Credit Agricole increased by 1% on Monday, following a 26% rise over the past 12 months. Meanwhile, shares in Worldline were up by 4% on Monday, but had lost 66% of their value in the previous year.
Last year, Worldline experienced a significant drop in share prices after lowering its financial targets and warning about the impact of the economic slowdown in Europe. In response, Bloomberg reported that Credit Agricole was considering buying a stake in Worldline to support its struggling strategic partner.
Overall, this acquisition by Credit Agricole highlights the commitment of both companies to their joint venture and their determination to succeed in the financial services sector.
The Future of Electronic Payments in France
The recent strategic partnership between two leading firms is set to revolutionize the electronic payments market in France. With a significant investment of 80 million, they are launching a joint-venture payments processing company. This alliance, forged through a binding deal in July, aims to capture a major share of the market.
In this groundbreaking deal, the firms have combined their unique strengths. Worldline brings technical expertise to the table, while Credit Agricole offers unparalleled reach and scale. Together, they aspire to become a dominant player in France’s payments processing sector.
Their ambition is fueled by the shifting landscape from cash to cards, which is occurring in France, the Eurozone’s second largest economy. Despite this trend, cash still accounts for approximately 40% of all payments made in the country, according to data from Worldline.
Credit Agricole, currently the second largest bank in France based on assets, has made a significant declaration of confidence in its partner. While aiming to remain a long-term minority shareholder in Worldline, it has acquired a minority stake. This decision reflects Credit Agricole’s unwavering trust in Worldline’s capabilities.
Furthermore, Credit Agricole reassures stakeholders that this acquisition will have minimal impact on its CET1 ratio. By securing a strong foothold in the joint venture and committing to its long-term success, the bank is poised to thrive in the evolving landscape of electronic payments.