Jack Ma's Ant Financial eyes more deals in global expansion

[SHANGHAI] Ant Financial, China's largest provider of internet financial services, will continue investing in mobile-payment providers around the world to boost offshore revenue and buttress itself from rising competition and tighter regulation at home.

Controlled by billionaire Jack Ma, the Hangzhou-based firm will announce more "partnerships" this year with a focus on Asia and is also "actively assessing" other markets, Douglas Feagin, the head of its international operations, said in a phone interview on Thursday.

Since 2004, Ant Financial's Alipay platform has built itself into an online giant that controls more than half of China's US$5.5 trillion mobile-payments market. Still, it has lost ground over the past year to Tencent Holdings Ltd and the prospect of increased regulation on internet finance has the firm looking outside its home turf for growth.

Over the past two years, Ant Financial has unveiled investments in countries including India, Thailand, South Korea and France, and is currently negotiating to acquire MoneyGram International Inc.

"It's a very clear and determined strategy that we want to extend the range of services we have," said Mr Feagin.

"We look to make further announcements and deals on partnership over the course of 2017."

A former banker at Goldman Sachs Group Inc, Mr Feagin declined to identify specific investment targets.

Higher Bid

"In terms of funding that, we have a strong position given the scale and position of our business in China and around the world to fund these businesses," he said.

"We have strong cash flows from our existing franchise and services. And we have access to markets as needed to add to these capabilities."

Ant Financial is seeking to raise less than US$3 billion by issuing debt to fund its acquisitions, including the MoneyGram purchase, people familiar with the matter said in February.

The Chinese firm raised its bid for MoneyGram in April, outbidding Euronet Worldwide Inc. While the acquisition faces potential obstacles, Mr Feagin said he still expected the deal to close in the second half of the year.

Formally known as Zhejiang Ant Small & Micro Financial Services Group Co, Ant Financial is Alibaba Group Holding Ltd's finance affiliate. In 2015, Ant Financial and Alibaba bought a 40 per cent stake in a company that owns almost half of India's Paytm Payments Bank Ltd, which is pushing to sign up more than a third of the country's 1.3 billion people as customers.

Lower Share

Paytm is "a very attractive business and the most important contributor so far in terms of our international expansion," Mr Feagin said.

"The other countries, Thailand, Philippines are at a very early stage, but on a very nice growth trajectory."

In China, Ant Financial's Alipay held 55 per cent of China's mobile payments market in 2016, down from 68 per cent the previous year, according to IResearch data. Meanwhile, Tencent's share had risen to 37 per cent from 21 per cent, and the firm leads in offline payments via QR codes, according to the research firm.

The market-share loss contributed to Ant Financial delaying its initial public offering plans as it seeks to focus on improve its performance, people with knowledge of the matter said this week. Ant Financial has been valued at US$75 billion by CLSA Ltd analysts and had been expected to list as soon as this year.

BLOOMBERG