Alibaba's financial arm, Ant, files for monster IPO ahead of march on the world's merchants and shoppers

Payments giant could be worth $200 billion

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Alibaba's financial services arm, Ant Group, will seek an initial public offering in both Shanghai and Hong Kong as it looks to expands its operations into the European and American markets.

The group, which was spun out of Alibaba Group in 2011, said on Monday that it plans a dual-listing in China's NASDAQ-like STAR board, plus the Hong Kong Stock Exchange.

The company did not specify a time frame or a fundraising target, but reportedly seeks a $200bn valuation that would make it one of the largest initial public offerings in history.

Ant runs Alipay, which has grown into China's dominant mobile payment system and boasts over 900m annual users.

The Alipay app, which uses QR codes to bypass the need for credit or debit cards, is ubiquitous in China, as is rival company Tencent's WeChat Pay service. Together, the two payment services accounted for 92 per cent of the market's $49 trillion of transfers in 2019 alone, according a report on payment systems by the People's Bank of China [PDF - Chinese].

Over the past few years, Ant has shifted its focus to international expansion. Alipay is now accepted in shops in 56 countries and regions, predominantly targeting Chinese travellers abroad. It has also bought a minority stake in nine Asian jurisdictions - including India, Thailand, Bangladesh, Indonesia, Hong Kong, Malaysia, and South Korea - allowing it to influence the global payments industry without having to apply for local licenses.

Although Ant has quickly expanded across Asia, it has struggled to make inroads into Europe and the Americas, where traditional payment systems such as credit cards and interbank systems remain the norm.

Over the last 12 months, the company has tried to buy its way into both markets by taking stakes in local companies. In March 2020, it bought a small stake in Swedish fintech Klarna, which is Europe's joint-largest privately owned fintech. In 2019 it acquired UK payments group World First for $700m .

America has proven a tougher nut to crack. In 2017, Ant tried to buy American money-transfer company MoneyGram for $1.2bn but was rebuffed by Washington on national security grounds.

Ant said late last year that it aims to have its services available through 10 million small and medium businesses in Europe over the next five years.

"The listings will help the company accelerate its goal of digitizing the service industry in China and driving domestic demand as well as position the company to develop global markets with partners and expand investment in technology and innovation," Ant said in a statement.

"Becoming a public company will enhance transparency to our stakeholders," said Eric Jing, executive chairman of Ant Group in the statement.

Alibaba founder, Jack Ma, retains a 50 per cent stake in Ant through his two investment partnerships. ®

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