Stripe and Advent Offer to Buy PayPal for More Than $53 Billion, Sources Say

Stripe and private equity firm Advent International have made a joint offer to acquire PayPal Holdings (PYPL) for $60.50 per share, in a deal that would value the payments company at more than $53 billion, two people familiar with the matter said. The offer, submitted earlier this month, is backed by approximately $50 billion in committed financing from banks and represents around a 28% premium to PayPal's closing share price on Tuesday.

The sources declined to be named as the deal discussions are confidential. PayPal, Stripe, and Advent declined to comment. Reuters first reported the news late on Tuesday.

Strategic Rationale

Combining Stripe and PayPal — the most widely used payment platforms for internet merchants — would create one of the world's largest global online payments companies, processing approximately $3.7 trillion in annual payment volume.

The proposal follows an initial approach made in early April, the sources said. Stripe and Advent have not received a response from PayPal and are seeking to advance discussions in the coming weeks. Under the proposal, Stripe and Advent would jointly own PayPal, with each holding an equal stake, rather than breaking up the company. There is no certainty the approach will result in a transaction.

PayPal's Challenges and Turnaround

PayPal shares surged nearly 17% following the news. The chart below shows PayPal's share price from 2017 to 2026:

PayPal shares are trading close to 10-year lows. The company's market capitalisation peaked at approximately $360 billion in 2021 and fell to as low as roughly $36 billion this year. It has lost more than 40% of its market value over the past 12 months.

Founded in the late 1990s, PayPal was an early player in digital payments but has faced competition as consumers embrace alternative payment methods, with rivals such as Apple Pay and Google Pay gaining market share. It has spent the past several years grappling with slowing growth and intensifying competition.

After taking over in March, PayPal CEO Enrique Lores started a sweeping turnaround exercise to simplify the payments provider and sharpen its focus on growth. In April, the company split its operations into three units covering checkout, consumer financial services (Venmo), and payments and crypto, while making a series of management changes.

Analyst Views

Despite the valuation premium, William Blair analyst Andrew Jeffrey said, "We do not think PayPal's new CEO will likely embrace what could be viewed as a low-ball offer. If the current offer is an opening salvo, we could see Stripe and Advent go as high as $70 per share."

The strategic appeal is that Stripe's business has been overwhelmingly focused on merchants, while PayPal adds more than 430 million consumer accounts and direct consumer payment and banking relationships. A Stripe-PayPal combination would allow more transactions to flow across its own network, reducing reliance on processors like Visa or Mastercard, which could help bypass transaction fees and earn more from each payment. The deal could also bolster Stripe's stablecoin ambitions, giving the company a vast consumer distribution network to help drive mainstream adoption of stablecoin-based payments.

Global Payments M&A Activity

The potential PayPal transaction would add to recent M&A activity in the global payments sector. In 2025, Global Payments agreed to acquire rival Worldpay from FIS and private equity firm GTCR for $24.25 billion. Mastercard is also exploring the sale of a majority stake in its UK payments subsidiary Vocalink.

Company Performance

PayPal's revenue rose 7% to $8.35 billion in the first quarter, beating analysts' average estimate of $8.05 billion. On a currency-neutral basis, total payment volumes jumped 8% over a year ago to approximately $464 billion. Lores outlined plans in May to leverage AI to streamline operations and eliminate duplication, with initiatives expected to save about $1.5 billion over the next two to three years, to be reinvested to drive new growth.

Privately held Stripe, founded by brothers John and Patrick Collison in 2010, is among the industry's most valuable companies, valued at $159 billion in a February tender offer.

Market Sentiment: 

The sentiment is cautiously optimistic, reflecting the strategic logic of a Stripe-PayPal combination but acknowledging significant execution and valuation risks. The 28% premium to PayPal's recent trading price is reasonable given the company's depressed valuation — trading near 10-year lows and down 40% over the past year. PayPal's 430 million consumer accounts and Venmo's peer-to-peer network would complement Stripe's merchant-focused business, creating a vertically integrated payments powerhouse that could bypass Visa and Mastercard fees. The stablecoin angle adds a forward-looking growth dimension. However, the offer is low relative to PayPal's $360 billion peak valuation, and CEO Lores is unlikely to accept what some analysts view as a low-ball bid. The $70-per-share potential counter-offer suggests room for negotiation. The transaction, if completed, would be the largest in the payments sector, facing significant regulatory scrutiny given the combined entity's market dominance. For Stripe, the deal would provide access to a vast consumer base, accelerating its digital wallet and crypto ambitions. For PayPal shareholders, the offer provides a much-needed floor, but the company's underlying challenges — slowing growth, intensifying competition, and margin pressures — remain. The turnaround initiatives may bear fruit, but the market has been sceptical. The deal is far from certain, and the outcome will depend on Lores' willingness to sell at a discount and regulators' appetite for such a large consolidation. The payment sector's recent M&A activity suggests consolidation is a theme, but PayPal's unique consumer assets give it leverage. The next catalysts are PayPal's formal response and any counter-offer. The market is pricing in a probability of success, reflected in the 17% share surge, but the outcome remains uncertain. For investors, the offer creates a floor, but the upside is capped unless a higher bid emerges. The long-term strategic rationale is compelling, but the execution and regulatory hurdles are significant. The sentiment is positive for a deal, but caution is warranted given the complexities and the board's likely resistance to a low-ball offer. The next few weeks will be critical in determining whether this transforms into a full transaction or fades away. PayPal's underlying business remains challenged, and the offer may be the best exit opportunity for shareholders, but the board will seek to maximise value. The market is watching closely.

Disclaimer:
This content has been generated using AI technology and is intended for informational purposes only. While efforts have been made to ensure accuracy and relevance, this text should not be considered professional advice or an official statement. Always verify information from authoritative sources before making any decisions. This is not financial advice.