Chinese e-commerce giant Alibaba said it now owns a 33% stake in its financial services affiliate Ant Financial, which operates the Alipay digital payment service.
Alibaba had announced the plan to take the stake in Ant last year, but it had to wait for China’s regulators to approve its ownership. The new equity ownership replaces the two companies’ previous agreement under which Ant shared part of its profit with Alibaba.
Bankers and analysts say the new arrangement could pave the way for the closely-held Ant Financial, which was valued at $150 billion in its last fundraising, to consider going public. But they don’t expect a decision any time soon.
“The next question is when Ant Financial’s IPO will happen,” said Daiwa Capital Markets analyst John Choi. Given Uber’s disappointing market debut earlier this year and the recent turmoil at WeWork, Ant is unlikely to rush its decision, Choi said. For now, “Ant has other growth initiatives to work on.”
Alibaba’s direct ownership in Ant makes their relationship more formal. In 2011, Alibaba founder Jack Ma separated Alipay from Alibaba and took it under his control. While Alibaba said the transfer was aimed at ensuring Alipay would be allowed to continue its business in China, the move prompted objections from major shareholders such as Yahoo at the time.