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Alibaba Group has bought a 33 percent equity interest in Ant Financial, pulling the financial tech giant closer to mainland China.
Following the acquisition, Ant will no longer be required to pay 37.5 percent of its pre-tax profits to the e-commerce behemoth.
The profit transferal agreement was brokered in 2011 following a dispute Alibaba and Yahoo which consequently led the former’s co-founder Jack Ma to shift Ant Financial – formerly known as Alipay – into a separate entity he controlled. Concerns about conducting business in China with a foreign-owned entity was the cited for the move.
Every year we generate new stuff and we acquire new stuff. We never stop,» Alibaba chairman Daniel Zhang said at its annual investor conference in Hangzhou. «Payment and financial services are very important pillars in Alibaba’s system.
The latest deal places the value of Alibaba’s global portfolio at $83 billion with investments into diverse high tech industries including artificial intelligence and augmented reality, according to group CFO Maggie Wu.
Ant, valued at $150 billion, offers a full range of financial services and products including micro-lending, insurance, credit scoring and China’s largest money market fund. It is also in the midst of foreign acquisitions in India and Thailand. Its flagship digital payments platform currently boasts 900 million users.
