Headquarters of JP Morgan Chase & Co., JP Morgan Chase Tower on Park Avenue, Midtown, Manhattan, New York.
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JPMorgan said Wednesday it plans to buy a nearly 75% majority stake in Volkswagen’s payments business.
The US banking giant said the deal would help it expand its digital payment capabilities and enter the car industry for the first time.
Over time, the two companies plan to develop Volkswagen’s platform to cover markets outside the auto industry, JPMorgan said.
“We plan to build on Volkswagen Financial Services’ innovative foundations on the existing platform and apply the global scale of our payments experience to meet evolving customer expectations in the auto space and beyond, ”he said. Shahrokh Moinian, head of wholesale payments at JPMorgan’s EMEA, in a statement.
The financial terms of the deal were not disclosed.
Volkswagen has long been entering the digital payments industry. The firm’s payments group was established in Luxembourg in 2017. Its platform allows customers to buy and rent cars and pay for parking tickets and recharging electric vehicles, among other things.
The news did little to raise the price of Volkswagen shares, which fell more than 2% on Wednesday amid a sharp drop in European markets.
The payments division of the German carmaker will be under the control of JPMorgan’s wholesale payments business. The transaction is expected to be completed in the first half of 2022. JPMorgan hinted that the two companies could change the company’s brand after the deal is finalized.
It is the latest in a series of acquisitions and investments by JPMorgan this year. The company agreed in June to buy British wealth manager Nutmeg and OpenInvest, a San Francisco-based platform focused on ethical investments.