Australian buy now, pay later (BNPL) firm Zip has pulled out of a proposed $491m merger with US competitor Sezzle.
Following the announcement, shares in Sezzle snowballed by 30%. The company – which plans to cut 20% of its workforce – will receive a $11m termination from Zip to legal, accounting and other costs associated with the transaction.
Zip said the deal was ended by mutual agreement due to ‘current macroeconomic and market conditions’.
The combination of Zip and Sezzle was expected to lead to proforma 8.8 customers and proforma 60.5k merchants in the US.
Zip chair Diane Smith-Ganger 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.”
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