Ant Group signed a partnership agreement on Monday with both e-commerce company Alibaba Group, which it is affiliated with, and Bank of China aimed at boosting innovation in China’s financial sector ahead of the fintech’s planned blockbuster initial public offering.
BOC, which revealed the deal, said that representatives from the three companies signed it in Hangzhou. The agreement will entail exchanges of both resources and information, the bank noted.
The bank said that the companies will use the partnership as a way to improve how they serve both small and medium enterprises, as well as consumers.
BOC Chairman Liu Liange said that the bank will use its experience to bring new business development opportunities to Ant Group and Alibaba, according to the bank’s statement. In turn, Liu said he is hopeful that Ant Group and Alibaba will help the bank with digital transformation.
Representatives for Ant Group, Alibaba and BOC either did not respond to requests for comment or were unavailable outside business hours in China.
Alibaba co-founder Jack Ma has effective voting control over Ant Group due to voting power over a pair of entities that hold shares in the company, Alibaba said in its most recent annual report. It also noted that it acquired a 33% stake in Ant Group in September 2019 in exchange for ending a profit-sharing deal.
Additionally, Alibaba noted the companies’ historical relationship due to Ant Group’s Alipay business, which it said was spun out in 2011 in order to make it easier to obtain a Chinese payment business license.
Ant Group said in July that it will pursue an initial public offering, with plans to list its shares on both the Stock Exchange of Hong Kong and the Shanghai Stock Exchange’s STAR Board. The company plans to target a valuation of $225 billion, and the share sale could raise as much as $30 billion, Bloomberg reported, citing people familiar with the matter.
Earlier this month, Ant Group disclosed in a regulatory filing that it hired Chinese financial firms CSC and CICC to assist it with preparation, which it said will include reviewing its accounting management, securities market staff training and exploring related party relationships.