Ant Financial, Alibaba’s spin-off financial services arm, is planning to further its international expansion through an enhanced merger and acquisitions spree in coming months. And to lead the same, the company has initiated early talks with banks to bring in capital to the tunes of $3 billion in the form of debt, reports Reuters. This development has also been corroborated by The Information.
Sources privy to the situation have shared details of ongoing talks saying banks have started making ‘soft pitches’ to help the company raise more funds. The said funding will most likely be picked in the form of loans and used to continue the company’s planned expansion. It will not only help them complete its recent acquisitions, like those of Moneygram but also boost investments into existing solutions.
This development has been confirmed by a spokesperson from Ant Financial, who says,
It is the market practice for a globalized company like Ant Financial to raise debt in U.S. dollars.
Jack Ma-owned Alibaba has already claimed a prominent position in the e-commerce market of China. It is now looking to further expand its roots into other neighboring countries, through India-based Paytm. And, this has not, in any way, caused Alibaba’s spin-off entities from leading their own expansion sprees into unexplored foreign lands.
Ant Financial, who manages the company’s digital banking service MyBank and wallet service AliPay, has been carving out its expansion to India via Paytm and Southeast Asia via Ascend Money. The company has recently decided to include U.S into its realm of expansion by the $880 million acquisition of money transfer service provider MoneyGram (MG).
This transaction is expected to close by the second half od 2017. It can be seen as a win-win situation for both players as Ant provides MG access to its 450 million Chinese user base and MG will provide access to its services and reach in the U.S. Further, this is not the only deal Ant Financial has cracked in the States. It has also partnered with payment processor First Data and hardware solution provider Verifone to provide Chinese travelers easy payment and transaction alternatives.
The financial services giant started charting this international growth map after securing a monstrous $4.5 billion in its Series B fundraising round last year. The investors for this round included sovereign wealth fund China Investment Corp (CIC), CCB Trust, a subsidiary of China Construction Bank, China Life, China Post Group, China Development Bank Capital and Primavera Capital Group. This growth plan is also expected to boost its chances of an oversubscribed and successful IPO, similar to that of Alibaba. Ant Financial’s rumored IPO is due in the next year or two.