I am feeling it right here – Ant Group, the Chinese “Amazon of Money”, will likely acquire Nigeria’s Interswitch next year. Interswitch has some great properties in Verve, and data, as the pioneer of the electronic payment sector in Nigeria. While Ant Group (of Alipay) has tons of money to buy anything on its way – it just raised $34 billion, the largest IPO in the last few days – the company may not like to spend about $1 billion possible price tag on Interswitch. But it needs data, and for that, it will not give up.
In a record breaking move, Jack Ma’s Ant Group pulled off the biggest share sale in history, with a $34.1 billion Initial Public Offering (IPO), beating Saudi Aramco’s previous record of $29.4 billion.
The Ant Group has been in market news as it prepared to make its market debut. The regulatory filing released Monday showed the Chinese tech giant priced its dual listing on the Hong Kong Stock Exchange and Shanghai’s Star Market at 80 Hong Kong dollars ($10.32) and 68 yuan ($10.13) per share respectively.
The $34.1 billion IPO puts the company’s value at $310 billion. Ant’s decision to file its initial public offering with Shanghai and Hong Kong markets signals a looming boycott of US markets by Chinese firms. The Chinese government has recently been encouraging its companies to avoid US markets, following the economic and political tensions between the two countries that have put Chinese companies under serious scrutiny in America.
America had made it clear that the Ant Group cannot come to any party. A deal to buy MoneyGram by Ant was killed in 2019 by the US government. With Europe not offering friendly red carpets and the ambition of Ant so huge, a path through Nigeria becomes inevitable.
Interswitch Verve is a great product and can be scaled all over Africa; Interswitch missed the opportunity as I explained in the monopoly hangover piece. No other sub-Saharan African company has that type of product. So, it is natural that Ant Financial will come for it. Verve offers it a promise to punt Visa and Mastercard; in 2019, Ant processed $18 trillion worth of transactions while the American duo pulled $16 trillion.
But assume that Interswitch is not possible, expect Flutterwave to be on the horizon. The interest in Ant Group’s IPO was so huge that the Hong Kong institutional book was “oversubscribed just one hour after the launch”. That is the level of success Ant has achieved. Interestingly, there is no company in the Western world that comes close to its scale; Ant is nearly 5x the value of Goldman Sachs! Justifying that confidence requires doing some global shopping. Expect Ant to play big in Africa – Interswitch and Flutterwave are my favorite targets.
The book was oversubscribed just one hour after the launch on Monday, two separate sources said, demonstrating investor frenzy for the initial public offering (IPO) of the Chinese fintech giant that has stoked heavy demand for cash and sent Hong Kong money market rates to five-month highs.
Ant Group declined to comment on the planned early closure of the Hong Kong institutional book.
It is looking to raise up to $34.4 billion in Hong Kong and Shanghai, with the offer split between the two cities, giving it a valuation of about $312 billion.