Barclays is in the final stages of securing a £650m deal with Brookfield Asset Management to transfer control of its UK payments business. 

The agreement, expected to be announced later this month, will see Brookfield initially acquiring a 10% stake in Barclays’ merchant acquiring division. Three years later, the Canadian investment giant will take a further 80% stake, leaving Barclays with a minority 10% holding.

As part of the deal, Barclays will inject £400m into the payments unit to support its return to sustainable growth. Additionally, the bank will provide approximately £250m in regulatory capital to ensure deal approval.

The sale follows Barclays’ February 2024 announcement that it was exploring strategic options for its payments arm, one of the UK’s largest merchant acquiring businesses. Valuations of the division have varied, with estimates ranging from under $1bn to $2.5bn.

Under the leadership of CEO CS Venkatakrishnan, Barclays has seen its market capitalisation rise to over £44bn, with shares surging more than 75% in the past year.

While both Barclays and Brookfield declined to comment on the transaction, the bank previously stated: “We are exploring a number of options for investment in our market-leading merchant acquiring business, including strategic partnerships. We will provide any further updates in due course.”