Afterpay takes a bow, officially uniting with Block (ASX:SQ2) shares on the ASX

Key points

• Block shares are leaping on the ASX in Tuesday’s session
• The Scheme of Arrangement between Afterpay and Block has officially been implmented
• First integration of Afterpay’s buy now, pay later offering made in Block’s seller ecosystem
• New board appointment of former Afterpay director made

The Block Inc (ASX: SQ2) share price is enjoying a positive session today as it officially takes Afterpay under its wing.

At the time of writing, shares in the US-based financial services company are up 8.11% to $174.50. In turn, Block shares are now trading at their highest level since hitting the ASX.

So, what exactly does it all mean for the two unified companies and their shareholders?

Waking up to Block shares instead of Afterpay

Today, former Afterpay shareholders will have noticed their shares in the buy now, pay later (BNPL) company are not being displayed in their portfolio. Instead, investors will find Block shares in their absence following the successful Scheme of Arrangement implementation.

In short, Block has now officially acquired all the issued Afterpay shares. That means former shareholders of the BNPL company should now be staring at 0.375 Block shares for every Afterpay share that was previously held.

The milestone draws a close to what has been a nearly six-month-long endeavour. Furthermore, during this time the Block share price has eroded by 55% — taking the value of Afterpay down with it.

However, with the formalities now behind it, the company is putting the new acquisition to work. According to the release, the US fintech company launched its first integration of Afterpay in the United States and Australia. Now Block sellers using Square Online can leverage the installment option for their e-commerce offering.

Commenting on the implementation, Block co-founder and CEO Jack Dorsey said:

We’re excited to welcome the Afterpay team to Block and are eager to get to work. Together, we’ll deliver even better products and services for sellers and consumers while staying true to our shared purpose of making the financial system more fair and accessible to everyone.

What else?

Alongside the acquisition news, Block announced the appointment of former Afterpay director Sharon Rothstein to the board of directors.

In acknowledging the appointment, Rothstein said:

I’ve long admired Block’s purpose to make the financial system more accessible and inclusive. I’m honoured and excited to bring my global experiences to the diverse expertise of this Board.

Lastly, for new holders of Block shares, the company is set to report its fourth-quarter earnings on 24 February 2022.

The post Afterpay takes a bow, officially uniting with Block (ASX:SQ2) shares on the ASX appeared first on The Motley Fool Australia.

More reading

• Trouble in tech land may not be the only reason Block (ASX:SQ2) shares have dived 17% since listing
• What happened to ASX buy now, pay later shares today?
• 5 things to watch on the ASX 200 on Thursday
• What happened to ASX tech shares today?
• There’s a new kid on the Block (ASX:SQ2), but how does it make money?

Motley Fool contributor Mitchell Lawler owns Block, Inc shares. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited and Block, Inc. The Motley Fool Australia owns and has recommended Afterpay Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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