Alibaba and Ant Financial to form new committee to ensure closer cooperation
Mar 11, 2019 (China Knowledge) - Alibaba Group Holdings and affiliate Ant Financial will be establishing a new steering committee to be led by the e-commerce giant to lead joint business initiatives and ensure that the two companies’ long-term interests remain aligned.
The new committee will be headed by Alibaba’s CEO Daniel Zhang with Ant Financial’s chairman Eric Jing as second-in-command. Committee members will be responsible to ensure that both companies’ work together.
The formation of the new committee comes as Alibaba looks to take a one-third equity stake in Ant Financial which will provide the e-commerce giant an avenue to keep Ant Financial aligned with its e-commerce business even if the latter goes public.
Alibaba has not held a stake in Ant Financial since founder Jack Ma spun out the business but has indicated that it will purchase a 33% stake in its affiliate in February last year, clearing the way for a potential IPO to create a new entity that would be worth more than USD 600 billion.
The acquisition of a stake in Ant Financial would come in exchange for the latter intellectual property rights with no cash involved. Following the deal, Ant Financial would then end royalty payments to Alibaba.
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