Alibaba Group Holding Limited (Alibaba)and Ant Small and Micro Financial Services Group Co., Ltd.(Ant financial)have agreed today that Alibaba will acquire a 33% of the total capital equity of Ant Financial.
The transaction will take place under the 2014 agreements previously signed on this matter by both companies with some ammendments still pending from the approval by PRC’s Authorities.
Alibaba will acquire Ant through an onshore PRC subsidiary and subsequently the Chinese giant will terminate Alibaba’s current 37.5% profit share in Ant Financial.
Ant financial will deliver Alibaba’s subsidiary in the PRC the 33% of its capital in newly issued shares. Alibaba will not need to pay for the shares in cash as the transaction will be funded with the money Ant Finacial owes Alibaba for some transfers of tech and intellectual propperty rights.
Daniel Zhang, Chief Executive Officer of Alibaba Group, said, “This transaction is a significant step for Alibaba to enhance our long-term strategic relationship with Ant Financial as we
continue to pursue our mission to make it easy to do business anywhere. Importantly, an equity stake in Ant Financial enables Alibaba and our shareholders to participate in the future growth of the financial technology sector, as well as the benefits of user growth and improved customer
Eric Jing, Chief Executive Officer of Ant Financial, said, “We are pleased to strengthen our strategic relationship with Alibaba. This marks the next step in our collaboration to generate more strategic synergies and deliver tremendous value proposition to our customers. We look forward to continuing to work with Alibaba as we pursue our mission to bring the world equal opportunities.”
Following the information provided by Alibaba Group on 4rthQ 2017 results, during the December 2017 quarter, Ant Financial continued to deliver rapid revenue growth from its key businesses including digital payment, wealth management and consumer finance.
During the quarter, Ant Financial successfully executed an aggressive user growth plan that resulted in substantial new user additions and increased user engagement. As a result of the user growth initiatives, in December 2017, Alipay Wallet’s daily active users more than doubled on a year-over-year basis.
Alibaba Group expects that Ant Financial will continue to invest to expand its market leadership in digital payment, develop new technologies for inclusive financial services, and accelerate its globalization strategy.
Image over the headline.- Ant Financial headquarters. © Ant Financial.