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French lender Crédit Agricole has taken a 7 per cent stake in payments group Worldline as part of a “strategic partnership” aimed at building a joint venture in merchant payments this year.
Crédit Agricole said on Monday that the deal, which builds on a partnership agreement announced last April, would lead to the creation of “a major player in payment services for merchants in France”.
Worldline, which is listed on the Euronext and is one of the world’s largest payments specialists, said the partnership would allow it to combine its technological capabilities with Crédit Agricole’s distribution networks.
The deal comes after a turbulent year for the Paris-based payments group, whose market value sunk by 60 per cent in one session last year after the company downgraded its annual sales outlook. Shares in Worldline were down more than 15 per cent in the year to date before market opening on Monday and rose by 5 per cent in morning trading.
The group is one of a number of payment companies including Dutch rival Adyen to have suffered sharp valuation drops in recent months. Analysts have put the falls down to a correction from lofty valuations buoyed by hype surrounding the sector during the Covid-19 pandemic, when lockdowns ground brick and mortar shopping to a halt and cheap money helped fuel a boom in online shopping.
Worldline, which entered France’s CAC 40 index with a value exceeding €11bn in 2020, was spun out of French tech group Atos in 2014 and has grown through acquisitions including that of Ingenico, a card payment terminal maker.
Crédit Agricole said the partnership showed that it was ready to “accompany Worldline’s development and allow it to pursue its strategy of becoming a leading European player in the payments market”.
The bank said preliminary work had started ahead of the creation of the joint venture, which would be launched later this year when it had received the necessary regulatory licences.
Crédit Agricole had in 2018 entered a partnership with Germany payments company Wirecard, which it paused amid concerns around the now-collapsed group’s accounting.
The bank said it expected the deal’s impact on its common equity tier 1 capital ratio to be fewer than 10 basis points.
