After spinning the payments wing of the company, Alipay, off in 2011 to more successfully navigate regulatory issues within the Chinese government bureaucracy, Chinese e-commerce giant Alibaba is reportedly in talks to reclaim a large portion of its lost stake in its erstwhile payments section.
Alipay processes Alibaba’s e-commerce payments in much the same way PayPal handles transactions on eBay. It also controls China’s largest money-market fund, with assets of $87 billion. Re-acquiring a larger stake in the company will likely drive up Alibaba’s value, particularly attractive now as the company is pushing toward an estimated $20 billion U.S. IPO.
Alipay is today controlled by a company in which Alibaba founder and CEO Jack Ma has a 46 percent stake. Re-acquisition by Alibaba would lessen Ma’s direct control, as he is only a 7 percent owner in Alibaba.
The talks are still in early phases, changing the ownership structure is “still only a concept at this point, and there is no timeline,” notes a source familiar with the situation, reports The Wall Street Journal.
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