[HONG KONG] Alibaba Group Holding's finance arm plans to invest about 1.2 billion yuan (S$265 million) for control of a China insurance unit of Cathay Financial Holding, according to a person familiar with the matter.
Zhejiang Ant Small & Micro Financial Services Group is buying a 60 per cent stake in Cathay Insurance in order to gain a license to develop insurance products, the person said, asking not to be named because the matter is private.
The investment would allow Ant Financial to enter the business faster than by applying for its own license. Ant Financial has ambitions to become a dominant online financial services provider, sometimes taking on powerful mainland China state banks on their own turf.
More than 200 million users of Ant Financial's Alipay payment system already manage their wealth via financial products like Yu'E Bao, a money-market fund that pooled in 613.4 billion yuan by June 30.
The company introduced a new application called Ant Fortune in August that lets users buy about 900 fund products from more than 80 Chinese financial institutions.
Ant Financial declined to comment in an e-mail. Alan Lee, a spokesman for Taipei-based Cathay Financial, declined to comment. Cathay Financial, which provides life and automotive insurance and consumer financing, isn't related to Cathay Pacific Airways Ltd.