The Competition Commission of Pakistan has approved Alipay Holding Limited (Hong Kong) to acquire 45% Telenor Microfinance Bank Limited shares.
Alipay is a part of the internet giant Alibaba, Chinese retail, internet, technology, and AI company. On the other hand, Telenor Microfinance Bank is Pakistan’s first scheduled microfinance bank that provides small loans to people who aim to set up their own businesses to come out of poverty. The deal between the two is the part of some previously made commitments between the former prime minister of Pakistan, Nawaz Sharif, and the founder of Alibaba group in 2017. Mr. Jack Ma showed his inclination towards investment in Pakistan as he met Mr. Nawaz Sharif while they were both at the annual meetings of the World Economic Forum.
Ant Financial is the parent company of Alipay and the financial services affiliate of Alibaba, which acquired 45% of Telenor Microfinance Bank with $184.5 million in March 2018.
Acknowledging the investment in a press release, Sigve Brekke, CEO of Telenor Group, said,
“Partnering with a world leading payment provider like Ant Financial will strengthen Telenor Microfinance Bank’s future payment platform and set new standards in the digital banking business in Pakistan. The establishment of this partnership is well in-line with the expressed Telenor strategy of focusing our financial services efforts in emerging markets, making sure that we’re able to build and modernize the businesses in line with customer needs. I’m truly excited about the opportunities this partnership brings for Telenor Microfinance Bank going forward.”
The partnership aimed to connect and combine Telenor and its 20 million customers with Alipay that would facilitate more and more small businesses and provide financial support to individuals who want to set up micro-businesses in the future in Pakistan. Whereas, Ant Financial seemed equally pleased with this opportunity of partnering with Telenor as the company aims at bringing equal opportunities to the world. Also, providing an improved user experience on Easy Paisa was on the to-do list for the company.
The approval regarding the acquisition of shares has been granted at a very crucial time. Not to forget that China is experiencing a slow economic growth rate which has influenced Alibaba too. Alibaba’s expected revenue has been cut down by 5%, keeping in mind the conditions that follow the company’s trade war with the United States of America.
The stats regarding the growth of Alibaba were quite clear from the New York Times latest report. The report states that Alibaba made a jump of 54% in revenue compared to the last year, but the analysts were expecting more.
“The global economy is in a state of uncertainty, The U.S.-China trade tensions create increased risk of instability,” says Daniel Zhang, Alibaba’s chief executive.
The final orders on this appeal were pending as the federal cabinet removed three members of CCP. Finally, however, the High Court gave orders to the three members of CCP, followed by the decision for the share acquisition approval.
Telenor seems to have taken up the opportunity towards a new growth dimension, as the mobile network services providence seems to saturate in the coming five years. However, Alipay’s expected instability foresight raises many questions!
What do you think about this latest acquisition of shares by Alipay?
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