After a month-long postponement, the Bank of Spain approved Block's acquisition of Afterpay. It was the final requirement necessary for the almost $30 billion transaction to proceed.
Afterpay Ltd, an Australian purchase now, pay later startup, announced on Wednesday that the Spanish lender has approved its acquisition by payments company Block Inc, formerly known as Square Inc.
Afterpay said on Wednesday that its ASX-listed shares would be suspended from trading at the close of trading on Jan. 19.
Afterpay shareholders have previously overwhelmingly accepted the transaction, with nearly 100% of shares voting in favor.
They applauded the deal's final regulatory approval on Tuesday, pushing Afterpay's shares up 5.5% to $77.46 in early trade.
Block's shares have shed more than 40% of their value since the news of the purchase.
The two businesses can now proceed with the transaction, which would be Block's largest to date and the largest acquisition of an Australian entity in history.
Block intends to leverage Afterpay, which compensates merchants in exchange for allowing consumers to pay for products and services in four interest-free payments, to strengthen the connection between its Cash App and vendor ecosystems.
"Afterpay, its leadership, and staff have demonstrated that ground-breaking fintech innovation developed in Australia has global reach," Afterpay Chair Elana Rubin told MarketWatch.
On January 20, Block's secondary shares, dubbed CHESS depository interests, will begin trading on the Australian Stock Exchange. Afterpay owners will receive 0.375 shares of Square's Class A common stock for each share they own under the terms of the acquisition.
"The team is ecstatic about the prospect of embarking on an incredible next chapter with Block and anticipates implementation on February 1, 2022," Rubi added.
By the middle of this month, shareholders will have to pick whether to receive Block shares listed in the United States or new Block CDIs listed on the Australian stock exchange. If no decision is made, the ASX is the default alternative for domestic investors.
Afterpay's share price will be halted from trading at the close of business on January 19.
Meanwhile, Block shares have come under fire as a result of increased regulatory scrutiny. The Consumer Financial Protection Bureau of the United States said a week before Christmas that it had opened an investigation into buy now, pay later loans.
Afterpay was founded just seven years ago. In addition to regulations including responsible lending, surcharging and money laundering compliance, new competitors emerged, resulting in wild swings in its shares.