Square shareholders have given the thumbs up to the $US39 billion merger with Afterpay

Square shareholders have given the thumbs up to the $US39 billion merger with Afterpay
Square founder and Twitter CEO, Jack Dorsey. Photo: Getty Images
  • Square shareholders have greenlit the company’s $US39 billion purchase of Australian BNPL pioneers, Afterpay.
  • The deal was agreed to in August, and will see Afterpay and its co-founders Anthony Eisen and Nick Molnar folded into Square as early as the first quarter of 2022.
  • Attention has now turned to shareholders at Afterpay, who will vote on a scheme of arrangement, which the company’s board has recommended approval of.
  • Visit Business Insider Australia’s homepage for more stories.

Shareholders of Square have given the all-clear on issuing stock to complete a $39 billion purchase of Afterpay agreed in August, bringing Australia’s largest ever merger deal to its final stages. 

In a statement, Afterpay said it expects the transaction will be completed through the first quarter of next year, after Square shareholders cast their votes early Thursday morning. 

“As set out in the Scheme Implementation Deed, a condition precedent to the transaction between Square and Afterpay is the approval by Square stockholders of the issue of New Square Shares in connection with the Scheme. This condition is now satisfied,” Afterpay said.

Square, which was founded by Twitter CEO Jack Dorsey, reached an agreement to purchase Australian buy now, pay later (BNPL) pioneer Afterpay for $US39 billion in August

In a joint statement, the pair said the all-stock deal would bring Afterpay into Square’s larger stable of peer-to-peer and merchant transaction capabilities. 

The US-based Square said Afterpay’s BNPL functionality will be added to the Square Seller and Cash App ecosystems, allowing small merchants access to the increasingly popular method of payment and allowing Afterpay users to manage their payments on the existing Cash App platform.

After Square shareholders greenlit the deal, attention will now turn to shareholders at Afterpay, who are expected to cast their votes on a scheme of arrangement, which the Afterpay board has recommended approval of. 

Subject to court approval, a booklet detailing the scheme could be released as soon as tomorrow.

When the deal was announced, Afterpay co-founders and co-CFOs Anthony Eisen and Nick Molnar said the deal aligns with the company’s international ambitions.

“By combining with Square, we will further accelerate our growth in the U.S. and globally, offer access to a new category of in-person merchants, and provide a broader platform of new and valuable capabilities and services to our merchants and consumers,” they said.

Both Molnar and Eisen will join Square under the deal to work on the company’s merchant and consumer businesses, while one of the two will be appointed to the Square board.

The deal promises immediate returns for investors, with existing Afterpay investors to be granted 0.375 shares of Square Class A common stock for every unit of Afterpay they hold.

Square will offer a secondary listing on the ASX, allowing Australian-based investors to choose between shares listed on the NYSE or the domestic bourse.

Afterpay shareholders are expected to own 18.5% of the company once the deal is enacted, with an expected completion in the first quarter of the 2022 calendar year.