Berkshire Hathaway buys stake in Paytm

Berkshire Hathaway buys stake in Paytm

Buffett is set to acquire 3 to 4 per cent of One97 Communications Ltd., valuing the target at more than US$10 billion, the people said, asking to not be identified as the discussions are private.

While Berkshire and Paytm confirmed the deal, they did not disclose the terms of the transaction.

Other Paytm board members include Alibaba co-founder and executive chairman Joseph Tsai and Ant Financial CEO Eric Jing; Goldman Sachs Asia chairman Mark Schwartz and Shardul Amarchand Mangaldas managing partner Pallavi Shroff.

Speaking on CNBC television, Buffett also said investors remain better off owning a basket of stocks than 30-year bonds and other fixed-income securities, as US businesses benefit from a strong economy.

In May, Buffett had indicated an interest in the financial payments industry at an annual shareholders meeting, saying the sector was a huge deal around the world and that many companies were working to reinvent the space.

Also, the group has been under pressure to seek investment opportunities to utilise the over $100 billion cash on its books, he had said.

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Todd Combs, investment manager, Berkshire Hathaway, said, "I have been impressed by Paytm and am excited about being a part of its growth story, as it looks to transform payments and financial services in India".

Over the past year, Paytm's near-monopoly status in digital payments has been challenged by numerous players such as Google Pay, Amazon Pay, BHIM and Flipkart-owned PhonePe, while newer players such as Whatsapp's payments service are also expected to mount a significant challenge. In May past year, SoftBank had pumped in $1.4 billion (over Rs 9,079 crore) into Paytm.

One97 Communications, SoftBank and Alibaba did not immediately respond to requests seeking comment.

Paytm has been one of the prominent beneficiaries of the governments move in November 2016 to scrap high denomination notes.

The company crossed an annual gross transaction run-rate of Dollars 29 billion in May this year.

One97 owns 49 per cent of Paytm Payments Bank, which leads India's digital payments market.

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