Zip Co and Sezzle announce that they have agreed to terminate their previously announced merger, blaming the move on current macroeconomic and market conditions.

Zip says it remains firmly focused on its strategic plan. The company says that its underlying business is strong with consistent customer and transaction volume growth across core markets. Zip continues to expect that it will deliver group profitability in FY24.

As part of the mutual termination, Sezzle will receive from Zip $11 million, to cover, among other things, Sezzle’s legal, accounting and other costs associated with the transaction.

Chair of the Zip Board Diane Smith-Gander said:

“We believe that mutually terminating the merger agreement with Sezzle at this time is in the best interests of Zip and its shareholders, and will allow Zip to focus on its strategy and core business in the current environment.”

Let’s recall that, in February 2022, the companies entered into a definitive agreement under which Zip agreed to acquire Sezzle in an all-scrip transaction by way of a statutory merger under the laws of the State of Delaware.

Subject to the satisfaction or waiver of specified closing conditions, Sezzle stockholders would have been entitled to receive 0.98 Zip ordinary shares for every share of Sezzle common stock owned. The total consideration for the Sezzle shares in the transaction represented an implied value of Sezzle of approximately A$491 million. The proposed transaction valued Sezzle at a 22.0% premium.