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KKR Will Acquire Approximately $44 Billion Of Paypal's Buy Now, Pay Later Loans In Europe

KKR Will Acquire Approximately $44 Billion Of Paypal's Buy Now, Pay Later Loans In Europe
PayPal announced on Tuesday that investment firm KKR has agreed to buy a sizeable amount of its buy now, pay later (BNPL) loans in Europe, up to 40 billion euros ($43.71 billion).
Even though BNPL is still widely used by millennials and Gen Z customers following the pandemic-driven increase in usage, the sector's fortunes changed last year as rising interest rates and intense inflation lowered consumer purchasing power.
The deal, which is anticipated to generate approximately $1.8 billion in gross proceeds and finalise in the second half of the year, caused PayPal shares to increase by 2% in premarket trade.
The business claimed that the deal was already factored into its May growth prediction for adjusted profit, which was roughly 20% on a per-share basis and exceeded Wall Street expectations.
PayPal anticipates allocating approximately $1 billion in additional share repurchases in 2023 after the transaction closes, adding to an updated forecast of approximately $5 billion in share repurchases this year.
Globally, PayPal processed more than $20 billion in BNPL payments in 2018, a nearly 160% increase over 2021. PayPal has given more than 200 million loans to more than 30 million consumers worldwide since introducing its BNPL business in 2020.
The business stated that it will still be in charge of all customer-facing operations, including underwriting and service related to its European BNPL products.

Christopher J. Mitchell

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