Regulatory Approval Received For Afterpay Merger With Block Inc

Industry News

& Articles

Regulatory Approval Received For Afterpay Merger With Block Inc

  • $39 billion deal is Australia’s largest ‘merger-buy-out‘ transaction 
  • Afterpay shareholders to own 18.5 percent of Block Inc (NYSE, ‘SQ‘)
  • Newly issued CDIs commence ASX trading 20 January 2022
  • ASX ticker ‘SQ2‘   
  • Block Inc. seeks to apply Blockchain technology to revolutionise payments system 

Afterpay Limited (‘Afterpay‘ or the ‘Company‘) is an operating platform that enables merchants to offer a ‘buy now pay later option to their customers. Afterpay’s service offering to merchants is integrated with the merchant’s website for online transactions using the merchant’s in-store point-of-sale facility. Customers do not incur upfront fees or interest on purchases. Afterpay settles with the merchant up-front, less Afterpay’s commission income and subsequently assumes responsibility for the customer’s debt. Afterpay then seeks to collect the funds owed by the customer, by way of instalments.   

Afterpay employs 1300 people throughout its operations across Australia and New Zealand, as well as the USA and UK.

$39 billion merger approved by Bank of Spain

Australia’s largest merger deal is set to proceed after final regulatory approval was received on 12 January 2022 from the Bank of Spain, allowing Block, Inc (NYSE. ‘SQ’) to proceed with its acquisition of Afterpay. Block was previously known as Square, Inc. 

Afterpay shareholders will own 18.5 percent of the significantly larger entity, post-merger. The transaction is being effected by the Scheme of Arrangement and is now unconditional. The Scheme implementation date is 1 February 2022, which means that Afterpay shares will not trade on ASX after 19 January 2022. Former Afterpay shareholders will receive Holding statements or confirmation advice for new Chess Depository Interests (‘CDIs‘) in Block that will be despatched on 2 February. The new Block CDIs will commence trading on ASX from January 20 under the ASX ticker ’SQ2’. Settlement will be on a deferred basis. Trading on a normal settlement basis will commence from 2 February. Trading of New Block Shares on NYSE will also commence on 2 February. 

The Afterpay success story is a reminder of the spectacular shareholder returns that can be generated by Founder-led companies. Afterpay adds to the Australian capital markets landscape the numerous examples of how the hunger of Founders, together with the alignment of interests, can be a powerful combination. 

The Future

Former Afterpay shareholders owning the soon to be issued CDIs in Block Inc, will have a 18.5 percent stake in a US$68 billion, NYSE-listed, digital payments business currently run by its Founder, Jack Dorsey. Jack Dorsey, who was a co-founder and CEO of Twitter, has been running Block since its launch in 2010.

Block is a fintech company that provides point-of-sale terminals servicing micro and SME merchants. Its point of difference is that it helps merchants sell more products and makes it easier for them to run and grow their businesses. It does this by providing ‘add-on’ services like software for payroll, invoicing and inventory tracking. It also offers working capital finance.      

Interestingly, Block is now seeking to develop into a financial services conglomerate that embraces blockchain technology; hence the name ‘Block’. Blockchain technology enables data to be transferred securely because of its extremely complex encryption system. It enables every cash movement to be monitored and recorded in a way that it cannot be deleted or altered. It is essentially a digital event book, where the information transfer does not require a centralised intermediary like a bank to identify and certify information. 

Block Inc, is a Founder-led company with global aspirations and a platform of valuable capabilities and services to merchants and consumers. It is at the forefront of emerging technologies that could re-define how consumers pay merchants for their goods. The basis of this change is blockchain technology. Blockchain technology has the potential to change the way of transacting and has profound implications for the future of banking institutions.

Louis Mosmann

Louis Mosmann is a Private Wealth Client and Research Assistant at KOSEC- Kodari Securities. Louis covers macroeconomic events, global markets and ASX300 company announcements, allowing clients to make more informed investment decisions. Email Louis at

Comment on this company

Latest Stories

Rio Tinto Limited Navigates Challenging FY21, Invests In Greener Future

Rio Tinto Limited (ASX:RIO) delivered its 4Q21 results today, presenting lower production……

JB HI-FI’s Preliminary Half Year After Tax Profit Down 9.4 Percent

Preliminary unaudited HY22 financial results suggest that the retailer has weathered COVID……

Long & Short Term Influences Impacting The Oil Price Outlook Ahead Of 2022

Assessing the future price of oil, an understanding of the drivers of supply……

More for you

Australian Ethical Investment Foresees Higher Cost Outflows For 2H22

Australian Ethical Investment confirm positive growth trajectory amid plans to invest……

Blackstone Raises Bid For Crown Resorts To $13.10 Per Share

Crown Resorts has announced an increased bid price for its shares from an entity……

US Inflation Data Prompts First 2022 US Fed Rate Hike In March

US Labour Department statistics chart the highest inflation rates in 40 years……

Electric Car Batteries, Inflation, And Omicron: To Drive Commodity Prices

The electric vehicle market, along with growing concerns of inflation and……

US Cap Tech Corrections Expected, Innovation Drives Australian Tech

Analysts maintain a cautious view on US large cap tech companies for 2022……

Omicron Staff Shortages Disrupting Ingham’s Production And Distribution

The spread of Omicron is disrupting production and distribution……

KOSEC Terms & Conditions

Kodari Securities Pty Ltd (CAR 399556) trading as KOSEC is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC is a financial services company and any information provided by its platforms, portals, reports and documents is protected by copyright. Any unauthorised production of this information is prohibited.
KOSEC reserves the right to change or remove any information provided on our website, reports or any documents including these terms and conditions at any time without notice. The change or modification to the terms and conditions will be effective immediately upon posting an updated version on our website, necessary platforms and documents. It is recommended that you review the information provided on our website, including these terms and conditions frequently for any changes.

KOSEC provides general advice only. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. KOSEC recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Please make sure you read our Financial Services Guide (FSG).

KOSEC does not guarantee any returns. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance). Investing in the stock market can incur huge losses. Please also be aware that fees will incur on every transaction regardless of the performance of your investments or returns generated. Employees and or associates of KOSEC may hold one or more of the stocks, securities or investments reviewed by the company.

Your use of information from our website, reports, documents and from talking to our representatives/associates is at your risk. Under no circumstance should the investment be based solely on KOSEC information and general advice. You should seek professional financial planning advice.
KOSEC aims to maintain the accuracy of the data and information provided on this website, by using information prepared from a wide variety of sources, which KOSEC to the best of its knowledge and belief, considers accurate and does not make any representations or warranties of any kind, expressed or implied, about the completeness, accuracy, reliability, suitability or availability of the information provided.

We may at times refer to third parties, which the details of these third parties have been provided solely for you to obtain further information about other relevant products and entities in the market. KOSEC has no control over the information third parties have, or the products or services offered, and therefore make no representations regarding the accuracy or suitability of such information, products or services. You are advised to make your own enquiries in relation to third parties. Our inclusion of any third party content is not an endorsement of that content or the third party.

As a client you will be charged a yearly service fee and a set brokerage fee per transaction. Your service fee will automatically renew at the end of your agreed 12 month period at the same rate advertised at the time. Your credit card or bank account will be charged for a further year following which will again auto renew until you cancel your yearly service fee. You can cancel the auto renewal at any time in advance of the renewal date by contacting us. KOSEC is aware of the need to ensure the security of your credit card details and our payment systems are compliant with the Payment Card Industry (PCI) Data Security Standard.

You consent to receiving email correspondence from KOSEC, as well as companies KOSEC has an association with. These emails will be sent by KOSEC and third party companies. You can opt out of receiving any category of emails at any time by contacting us. We may from time to time inform you of special offers, or even ask your opinion of the services we provide, but your involvement is optional. Should you request us to do so, we will archive your details.

Indemnity and Liability
You indemnify KOSEC from all claims or threatened claims, suits, demands, damages, costs as well as including legal costs incurred in dealing with any threatened claim, expenses made by any person or corporation against KOSEC and any other amounts which is caused by KOSEC providing information, execution and General Advice.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from a decision made by you on the basis of information obtained through the use of our portal, reports, documents or any General Advice given and any transaction taken place.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from delays in executing orders for the client and acknowledges KOSEC makes no guarantees about the time taken to execute an order on behalf of the client. You acknowledge that KOSEC relies on third parties in providing technology and release KOSEC from any harm, loss or damage you may suffer as a result of the failure of such information technology.

Cookies and Links
KOSEC website, and its portal uses cookies, which lets us identify your browser while you are using the site or our portal. Cookies do not identify you personally. They simply allow us to track your usage patterns. If you prefer not to receive cookies, you can configure your browser to reject them or to notify you when they are being used. The functionality of the KOSEC website may be impacted if you restrict the use of cookies.

Fill up the form below and we will get back to you as soon as possible.



KOSEC’s CEO, Michael Kodari’s new book, “Stock Market Success” valued at $39.95, available at Dymocks book stores with all the proceeds going to Dymocks Children’s Charities.


Latest TV Commercial