IPO plans pushed back
Ant Financial’s IPO that had been expected to occur later this year has been put on hold, confidential sources familiar with the situation told the Financial Times recently. The decision by Alibaba (BABA) to swap its profit-sharing agreement with Ant for an equity stake in the business and Ant’s June fundraising was seen as part of a preparation to take the firm public.
However, the Financial Times now reports that the Ant IPO has been delayed and that there may be no IPO before the end of 2019 or much later. The delay in the Ant IPO is partly linked to China’s ongoing crackdown on Internet financial service providers.
Ant’s Alipay dominates China market
Ant Financial is known as Alibaba’s finance affiliate. It runs the Alipay mobile payment service, which processes Alibaba payments and also serves outside clients. Alipay was the preferred mobile payment service in Walmart (WMT) stores in Western China until March when Walmart decided to shift to Tencent’s (TCEHY) WeChat Pay. However, Alipay still dominates China’s mobile payment market, according to Analysys International.
Walmart and Tencent are large investors in Alibaba challenger JD.com (JD), which in June received a $550.0 million financial injection from Alphabet’s (GOOGL) Google and subsequently entered a global partnership.
Ant denied approval to buy MoneyGram
Ant Financial’s global push suffered a blow earlier this year when the US government blocked it from acquiring MoneyGram (MGI), a global money remittance company. Ant had agreed to buy MoneyGram for $1.2 billion in what was seen as an effort to accelerate its global expansion. The US government cited national security concerns in blocking the deal.