Western Union to acquire minority stake in stc pay
The Western Union Company (NYSE:WU) has announced that it has entered into a definitive agreement to acquire a minority stake in Saudi Digital Payments Company, or stc pay, a fully owned subsidiary of Saudi Telecom Company.
Under the terms of the transaction, Western Union will invest up to $200 million for up to 15% ownership of stc pay. In conjunction with the investment, the companies extended the terms of their commercial relationship.
stc pay has a strong base of over 4 million customers and an established regional brand in the fast-growing digital wallet market. Western Union believes that stc pay is poised to experience strong growth in the future.
Western Union operates a strong and resilient global business across digital and retail channels. In the third quarter of 2020, digital revenues increased 45% year-over-year, representing 21% of Western Union’s consumer business, and trended at an annual rate of over $900 million.
Western Union currently partners with stc pay, providing money transfer services that allow stc pay’s users to send money from its app to more than 200 countries and territories in over 130 currencies through Western Union’s extensive global network of accounts, wallets, cards and retail.
“I am extremely pleased with the progress of Western Union’s digital growth strategy this year. A key element of this strategy is partnering with innovative financial companies to expand services for their customers and drive incremental growth for Western Union. Our strategy has proven to be successful, and I am encouraged by the meaningful contribution our partnership with stc pay made to Western Union’s digital growth in 2020,” said Western Union Chief Executive Officer Hikmet Ersek.
The transaction is expected to close in the first quarter of 2021, subject to receiving all regulatory approvals.