Xero, an accounting software firm based in New Zealand, has agreed to acquire Melio, a payments provider, for USD 2.5 billion.

The acquisition aims to integrate payments into Xero’s existing offerings, offering both companies opportunities to scale and accelerate Xero’s growth in the US market.

Australia-listed and New Zealand-headquartered, Xero operates approximately 7% of its business in the US. This acquisition is part of their strategy to expand into the region and support small and medium-sized enterprises (SMEs) along with their accountants in better managing cash flow and accounting operations through a single, user-friendly platform.

Xero believes that this buyout will double its projected 2025 financial sales by 2028. Both companies share the vision of scaling in the US market and combining Xero’s accounting capabilities with Melio’s accounts payable and receivable solutions.

As a result, Xero suspended trading for its shares, seeking USD 1.23 billion from institutional investors to finance the purchase of Melio. Analysts provided cautious support for this deal. An RBC Capital Markets analyst highlighted that the deal offers benefits through increased US exposure via a fast-growing payments company and noted it makes strategic sense in the long term. However, navigating the complexities of the deal and its execution will take time.

A E&P analyst remarked that while the buyout price might seem high for Melio on its own, it could be justified if the two companies successfully achieve strategic synergies, particularly through broader distribution networks.

This acquisition follows a few previous Xero partnerships. In May 2025, they partnered with Ebury to enhance business operations by driving optimal automation, accuracy, and financial control across international markets. Also in that timeframe, Xero started collaborating with Atoa to optimize payments for UK businesses using Instant Bank Pay.