Deals | Alibaba Buying 33 Percent in Ant Financial, Portending An Initial Public Offering

Ant Financial has expanded its footprints outside of China, through offering services or investing in local players, in countries like India, South Korea, Singapore, Thailand, Malaysia, the US, Japan, etc.

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Deals | Alibaba Buying 33 Percent in Ant Financial, Portending An Initial Public Offering

Alibaba Group is buying a 33 percent equity stake in Ant Financial, its affiliate specializes in mobile payment, in exchange for certain intellectual property rights owned by the Chinese e-commerce conglomerate, the two companies announced Thursday.

The equity buy coincided with an upbeat financial quarter, ended December 31, 2017, that saw its revenue jump to RMB 83.03 billion (US$ 13.2 billion), an increase of 56% year-over-year, or the seventh consecutive quarter with over 50% yoy growth, as Daniel Zhang, the Group’s CEO, said in a conference call following the release of financial results.

Hangzhou-based Alibaba said in the announcement that the equity take would have no cash impact on Alibaba. Eric JING, Chief Executive Officer of Ant Financial, said that the move strengthened the strategic relationship between Alibaba and Ant Financial, also based in Hangzhou, marking the next step in their collaboration to generate more strategic synergies and deliver tremendous value propositions to customers.

The acquisition of stake could also portend an imminent initial public offering for Ant Financial, as has been rumored now and then.

Emerging from a payment escrow service for Alibaba’s marketplace Taobao, Ant Financial now offers a broad range of business including mobile payment (Alipay), wealth management (Yu’e Bao), credit scoring (Sesame Credit) and has expanded its footprints outside of China, through offering services or investing in local players, in countries like India, South Korea, Singapore, Thailand, Malaysia, the US, Japan, etc.

Writer: Ben Jiang