Sep 25, 2019 (China Knowledge) - Alibaba (BABA) has acquired a 33% stake in its fintech arm Ant Financial, as per the initial agreement between both parties when Ant Financial spun off from Alibaba in 2014.
The acquisition means that the profit-share agreement comes to an end in which Ant Financial was obligated to pay 37.5% of its pre-tax profits to Alibaba each quarter.
Ant Financial was established in 2014, and in the same year Alibaba and Ant Financial agreed on a profit-sharing agreement. In 2018, Alibaba announced plans to take a 33% equity stake in Ant Financial. This resulted in the delay of the IPO of Ant Financial on the NYSE in the same year.
Ant Financial is focused on serving small and micro enterprises, as well as individuals. It has become a prominent financial services company in China that handled everything from credit scoring to micro-lending business. The USD 150 bln company also operates the largest money-market fund in the country. Currently, Ant Financial is working on expanding its presence into Thailand and India.
The scope of services offered by Ant Financial include Alipay, online bank MYBank, credit scoring service Sesame Credit, lending marketplace Zhao Cai Bao, as well as Yu’e Bao, China’s largest money market fund.
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