Barclays and Brookfield Asset Management have announced a strategic partnership to transform Barclays' payment acceptance business, with plans to create a standalone entity over time.

Under the agreement, Barclays will invest approximately £400 million in the business, with the majority of this investment occurring during the first three years of the partnership. Brookfield will provide expertise to support the transformation and will be entitled to a financial incentive linked to the business's performance.

The partnership establishes a path for Brookfield to potentially acquire a significant stake in the business. After the third year and up to the seventh anniversary of the partnership, Brookfield may acquire approximately 70 per cent ownership interest at market value, subject to certain conditions including Barclays fully recovering its investment. Brookfield's initial financial incentive would then convert into an additional 10 per cent shareholding, giving it approximately 80 per cent ownership.

Barclays expects to retain a 20 per cent stake following the intended sale. The business will continue operating under the "Barclaycard Payments" brand and will remain the sole payment acceptance services provider to Barclays' clients for at least ten years.

Matt Hammerstein, chief executive officer of Barclays UK Corporate Bank, said: "Finding a partner to support us in transforming our payment acceptance business, in a way that will enable us both to serve our clients' interests better and pursue a path to releasing value from the business, demonstrates clear execution of our three-year plan to become a simpler, better and more balanced bank."

Sir Ron Kalifa, vice chair and head of Financial Infrastructure at Brookfield, commented: "Payments systems need to adopt a digital-first and data-led approach to provide world-class solutions to clients. We're excited to draw on our deep global payments expertise to partner with Barclays and together deliver the operational transformation required to create the market leader."

The deal marks the first transaction for Brookfield Financial Infrastructure Partners, a dedicated strategy within Brookfield's private equity business focused on digital assets enabling money movement. Brookfield has significant experience in financial infrastructure, having deployed over $5 billion in related transactions.

Barclays stated that the partnership and related investment are not expected to have any material impact on its current financial guidance or targets.

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