Barclays Bank is closing in on a deal to offload its merchant acquiring business to Canada's Brookfield Asset Management.
Barclays said in February that it was exploring a sale or partnership for the merchant acquiring division, which has struggled to remain competitive in the face of increasing competition from the likes of Stripe, Adyen and Dojo.
Sky News has learnt that the two companies are in the final stages of talks about a £650 million transaction that will initially see Brookfield acquiring 10% of the UK bank's merchant acquiring division.
Three years after the deal completes, Brookfield would then acquire a further 80% of the unit, leaving Barclays as a 10% shareholder.
Valuation has been a sticking point for Barclays, with potential investors baulking about paying good money after bad. In December, the bank wrote down its valuation of the business by £300 million.
A potential deal has also been complicated by the takeover of Barclays partner Takepayments by Global Payments, which could reduce revenues, and the substantial investment required in upgrading products and replacing ageing payment systems
Unusually, the agreement being finalised would see Barclays injecting £400m into the payments division in order to fund investment in returning it to sustainable growth, sources told Sky News .
Barclays would also provide roughly £250m of regulatory capital required to secure approval for the deal, they added.