Chinese e-commerce conglomerate Alibaba has acquired a 33% stake in banking behemoth Ant Financial, strengthening ties between the two Internet giants.
The deal terminates a 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.
Businesses operated by Ant Financial Services Group include Alipay, Ant Fortune, Yu'e Bao, Zhao Cai Bao, Ant Micro Loan, Sesame Credit and MYbank.
Daniel Zhang, chief executive officer of Alibaba Group, says: “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 experience.”
The moves was announced as part of Alibaba's Investor Day, during which the company presented fresh data on Ant Financial's soaring growth, with Alipay leading the way.
As of the end of June 2019, Alipay and its local e-wallet partners collectively served 1.2 billion users globally, representing a 20% growth in just six months since the end of December 2018. Since the launch of Alipay’s globaliaation strategy in 2016, the platform and its local e-wallet partners have seen an overall growth of 260% in the span of just three years.