**Barclays Partners with Brookfield to Divest Payments Business**
Barclays Plc has announced a strategic partnership with Brookfield Corp. to divest a portion of its payments business, aiming to enhance returns for the lender. As part of this initiative, Barclays will invest £400 million ($529 million) to facilitate the transformation of its payments unit into an independent entity. According to a statement released on Thursday, Brookfield will receive a performance-linked financial incentive and will have a four-year option to acquire up to 80% of the payments company after three years. Barclays anticipates that this transaction will allow it to fully recoup its investment while retaining a 20% stake in the new entity.
Matt Hammerstein, head of Barclays’ UK corporate bank, emphasized that the collaboration with Brookfield highlights the potential for growth beyond the existing foundations of the business. Under the leadership of CEO C.S. Venkatakrishnan, Barclays is committed to increasing investments in its UK operations and US consumer services to improve returns that have historically lagged behind competitors. To achieve this, the bank has been divesting non-core operations.
This latest move follows Barclays’ recent sale of its German consumer finance division and its agreement to offload a portfolio of non-performing Italian mortgages. The bank is aligning itself with a trend among European rivals by shifting focus away from the merchant-acquiring sector, which assists businesses in managing electronic payments. Such divisions are often sold to competing payment firms or private equity funds that integrate them into larger platforms.
Brookfield is actively seeking to expand its financial infrastructure portfolio, having recently acquired Middle Eastern payments processor Network International Holdings Plc for £2.2 billion in 2023. That same year, the Canadian asset manager appointed former Worldpay CEO Ron Kalifa as vice chair and head of financial infrastructure investments to strengthen its foothold in the sector.
Barclays’ merchant acquiring business, which provided payment terminals and integrated with digital wallets, was recognized as the third-largest acquirer in Europe, according to the bank’s presentation materials.
In conclusion, the partnership with Brookfield marks a significant step for Barclays as it seeks to optimize its operations and focus on core business areas, paving the way for future growth and improved financial performance.
**FAQ**
**What is Barclays’ recent partnership with Brookfield about?**
Barclays is partnering with Brookfield to divest part of its payments business, investing £400 million to create a standalone company, with Brookfield having the option to acquire up to 80% in the future.
