Investor Alert

The Wall Street Journal

Jan. 27, 2021, 9:04 a.m. EST

Jack Ma’s Ant Group responds to regulatory pressure from China with major reorganization

Jing Yang

Ant Group Co. is planning to turn itself into a financial holding company overseen by China’s central bank , responding to pressure to fall fully in line with financial regulations, according to people familiar with the matter.

Chinese regulators recently told Ant, which is controlled by billionaire Alibaba (NYS:BABA) (HKG:HK:9988) co-founder Jack Ma, to become a financial holding company in its entirety, subjecting it to more stringent capital requirements, the people said. Ant, in response, has submitted to authorities an outline of a restructuring plan, they said.

The plan represents a significant turnaround by a digital-payments juggernaut that has in recent years tried to  shed its image as a financial-services provider  and fashion itself as an internet-technology company, which helped it command lofty valuations. Before its  blockbuster initial public offering was called off  last November, Ant had been on track to go public at a valuation north of $300 billion, well above the market capitalizations of the world’s biggest banks.

Designating Ant in its entirety as a financial holding company wasn’t something earlier envisioned by the company’s executives and stakeholders. 

An expanded version of this report appears at WSJ.com.

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