Jack Ma’s Ant Group has reportedly emerged victorious in the battle against Ken Griffin’s Citadel Securities to acquire Credit Suisse’s Chinese banking business. This move signifies a shift in Alipay’s owner strategy, as they now plan to revisit previous ambitions following a relaxation of Beijing’s crackdown on tech companies.
Acquisition Details
If the deal is approved by regulators, Ant Group will purchase Credit Suisse’s Chinese investment banking venture from UBS for an undisclosed amount. The goal is to establish its own securities business using the licenses initially granted to the Swiss bank.
Government Preference
The Chinese government, however, favors selling Credit Suisse’s venture to a foreign buyer to align with the original license’s objectives. This license was initially given to Credit Suisse to open up the country’s financial sector to foreign entities.
Decision Time for UBS
UBS now faces a decision between the offer from Citadel Securities, based in Miami, which has a higher chance of approval, or the increased bid from Ant Group, headquartered in Hangzhou. The choice lies in UBS’s hands as they navigate this competitive landscape.
Citadel’s Bid for Chinese Venture
Citadel, founded by U.S. billionaire Ken Griffin in 1990, has emerged as the sole foreign contender to place a bid for a Chinese venture. Sources reveal that Citadel has offered to pay approximately ¥1.5- ¥2 billion ($208- $277 million) for the business in December.
Ant Group Enters the Fray
Following a prolonged crackdown on China’s tech sector led by Beijing, Ant Group has now entered the scene with its bid. This crackdown aimed to tackle supposed monopolistic practices within the industry after years of rapid and uncontrolled growth.
The regulatory actions taken resulted in a significant dip in the value of China’s leading technology firms, a situation that began with the cancellation of Ant Group’s initial public offering in November 2020. This move reverberated across the global investment landscape, signaling a shift in the regulatory landscape.
Conclusion of Regulatory Clampdown
An important milestone in this saga was the imposition of a $985 million fine on Ant Group by the Chinese central bank and securities regulator in July 2023. This event is widely viewed as the conclusion of the regulatory clampdown on the tech sector.
Prior to these actions, Ant Group, an affiliate of e-commerce titan Alibaba (BABA), had aspirations of venturing into the securities business. However, Beijing’s crackdown altered the course of events for the company.
Both Ant Group and Citadel were approached for comment on these developments.