Worldline is struggling, and Credit Agricole’s investment may be a lifeline.

Credit Agricole (EPA: ACA) is reportedly considering acquiring a stake in Worldline (EPA: WLN), leading to a nearly 12% surge in Worldline’s shares on Friday. The move aims to stabilize the struggling payments partner. Other French financial institutions may also play a role in Worldline’s future.

Earlier, Credit Agricole and Worldline had signed a joint venture agreement for payment services, anticipating approval by year-end.

Worldline shares had previously dropped by over 50% due to a cut in financial targets and increased cybercrime risks. The French payments group revised its sales outlook downwards due to a challenging economic environment, particularly in Germany, its largest market, as a key reason for the reduction in revenue forecasts for 2023. The warning has raised concerns about a prolonged consumer spending slowdown, contrasting with the company’s previously optimistic outlook, which was fueled by a post-COVID-19 surge in consumer spending. (Reuters)

Furthermore, asset sales, particularly from the Mobility division, are being considered by Worldline to reassure shareholders. The company’s share price decline has attracted interest from U.S. rivals and private equity firms, prompting French government monitoring and potential preference for a French-led offer.

Credit Agricole’s interest in Worldline boosted shares, but analysts remain cautious about driving up the company’s valuation without more information.

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