US payments giant Square is acquiring Afterpay in a $39 billion deal. 

In what is expected to become the largest merger and acquisition deal in Australian history,  Square is looking to open up a much larger pool of merchants to Afterpay and avoid having to invest on its own against its much larger, deep-pocketed competitors.

The deal is expected to close in the first quarter of calendar year 2022, but still requires Square and Afterpay shareholder approval. 

Square currently trades at a market capitalisation of $US115 billion in New York. THe company has announced it will set up a secondary listing on the Australian Securities Exchange to allow Afterpay shareholders to trade Square shares via CHESS Depositary Interests (CDIs) on ASX, while Afterpay shareholders will be able to elect to receive NYSE-listed Square shares or CDIs.

Afterpay co-founders Anthony Eisen and Nick Molnar will join Square when the deal completes. The Afterpay brand will be maintained, reports say.