PayPal Holdings Inc, which runs one of the biggest digital payment services in the market is now offering to buy the digital pinboard site Pinterest Inc for $45 billion. This combination could herald more financial technology and social media tie-ups in e-commerce.
If the deal becomes successful then it will be the biggest acquisition of a social media company, and it will surpass Microsoft Corp’s $26.2 billion purchase of LinkedIn in 2016. this comes after it was reported that internet shoppers increasingly buy items they see on social media, often following “influencers” on platforms such as Instagram and TikTok.
If PayPal successfully acquires Pinterest then it will allow the company to capture more of that e-commerce growth and diversify its income through advertising revenue. According to sources, PayPal is offering $70 per share, mostly in stock, for Pinterest, and the digital payment service provider hopes to successfully negotiate and announce a deal by the time it reports quarterly earnings on Nov 8.
According to sources, however, the deal is not yet certain and terms could also change as things move forward. The matter is being kept highly confidential and PayPal and Pinterest have also not commented on this matter.
PayPal shares fell 4.9% to close at $258.36, while Pinterest shares jumped 12.8% to $62.68.
“(The) combination would be a significant positive for PayPal’s ongoing monetization initiatives on both sides of its merchant and consumer platforms, especially if Pinterest’s social commerce platform gets integrated with Honey’s AI into PayPal’s destination app.”
PayPal has been quite active in boosting its e-commerce offering and the company has seen quite a success during the pandemic and has bolstered its position in recent years through acquisitions. It has also bought the online coupon finder Honey Science in 2019 for $4 billion and Japanese buy-now-pay-later (BNPL) firm Paidy for $2.7 billion earlier this year. It acquired return-service provider Happy Returns in May.