Alibaba acquires 33% stake in Ant Financial affiliate for fintech fuel
Jack Ma’s Alibaba Group will acquire a 33% equity interest in its affiliate Ant Financial as it looks to push deeper into the fintech world.
Under the terms of the agreements, Alibaba will acquire newly-issued equity from Ant Financial in exchange for certain intellectual property rights owned by Alibaba exclusively related to Ant Financial. There will be no cash impact to Alibaba following completion of the transaction.
Daniel Zhang, CEO of Alibaba Group, says the equity stake in Ant Financial enables it and its shareholders to “participate in the future growth” of the fintech sector with easier collaboration.
Upon closing, the companies will terminate the current profit-sharing arrangement under which Ant Financial pays royalty and technology service fees in an amount equal to 37.5% of its pre-tax profits to Alibaba. Financial details were not disclosed.
From Israel to Malaysia
Ant Financial is well known for its Alipay, which is often in the news with new deals.
A recent example is getting into Israel. In that one, Israel Credit Card and OneBill revealed they will be working with Alipay to offer payments for Chinese visitors to Israel. Ant Financial says the availability of Alipay means “Israel becomes the first country in the Middle East in which it can be used for instore payments”.
For Alibaba, its interest in fintech is also no secret.
A recent development was its cloud computing arm, Alibaba Cloud. This launched its Malaysia Tianchi Big Data Programme to get experts to collaborate and compete in developing tech solutions.
