Barclays to keep 20% stake in merchant payments arm amid Brookfield talks

Barclays is edging towards a deal to offload its merchant acquiring arm in the UK that will see it remaining as an investor in the business.

Sky News has learnt that Barclays and Brookfield, the Canadian asset management giant, are in detailed talks about a deal that would involve the British lender retaining a 20% stake in the division.

The discussions are ongoing, and a definitive agreement is not thought to be imminent.

Last month, Sky News revealed that Barclays had re-entered talks about a heavily structured deal with Brookfield after months of on-off negotiations.

Barclays said in February that it was exploring a sale or partnership for the merchant acquiring division.

Unusually for such a substantial corporate deal, Brookfield is not expected to pay a consideration for a controlling stake in the unit, but instead would see it bearing the costs associated with growing the business.

Estimates of the value of Barclays' merchant acquiring arm have varied wildly, ranging from less than $1bn to $2.5bn.

The talks come with Barclays in a position of comparative strength under its chief executive, CS Venkatakrishnan.

Its shares have soared by close to 90% over the last year as investors have digested progress in the performance of its investment banking arm.

A Barclays spokesperson said: "As we confirmed at our February investor update, we are exploring a number of options for investment in our market-leading merchant acquiring business, including strategic partnerships.

"We will provide any further updates in due course."

Brookfield declined to comment.