ISLAMABAD: The antitrust watchdog has allowed Alipay – an affiliate of online shopping giant Alibaba – acquisition of 45% stake in Telenor Microfinance Bank Limited, facilitating the company is starting its operations in Pakistan by the end of the current year.
The Competition Commission of Pakistan (CCP) has approved Alipay (Hong Kong) Holding Limited’s acquisition of a shareholding in Telenor Microfinance Bank, according to a statement issued by the CCP on Wednesday.
The move will pave the way for the entry of the world’s largest mobile payment platform into Pakistan. Ant Financial, the parent company of Alipay and the financial services affiliate of Alibaba, had acquired the 45% stake with an investment of $184.5 million in March 2018.
The CCP has given approval at a time when China’s biggest e-commerce company is anticipating a slowdown in its growth. Due to the slowing economic growth rate in China and trade war between the world’s two largest economies, the Alibaba Group has cut its estimate of revenue growth by around 5%.
Alibaba had revenues of $12.4 billion in the quarter ended September 2018 with a 54% increase from a year earlier, but it was less than what analysts had expected, the New York Times reported last week.
In January 2017, Jack Ma, the founder of the Alibaba Group, had shown his intention to invest in Pakistan after holding a meeting with the then prime minister Nawaz Sharif on the sidelines of the World Economic Forum’s annual meetings.
Founded in 2004 by Jack Ma, Alipay is part of the Alibaba Group, a Chinese multinational conglomerate specialising in e-commerce, retail, internet, artificial intelligence (AI) and technology.
Telenor Microfinance Bank is Pakistan’s first scheduled microfinance bank and provides microfinance and related financial services.
The CCP’s approval came only after the Islamabad High Court gave the order to its three members, including the chairperson who had been removed by the federal cabinet. In the absence of the chairperson, the CCP is not in a position to take any decision on the merger and acquisition requests.
The federal cabinet last month removed three members of the CCP, two deputy governors of the State Bank of Pakistan (SBP) and heads of three commercial banks on the grounds that they had been appointed by the last government in violation of laid-down procedures.
Since January 2018, the CCP has approved 66 mergers, acquisitions and joint ventures in different sectors including power generation, automotive, information technology, oil and gas, and food.
Some of the major transactions include the acquisition of Daraz.com by Alibaba Singapore Holding, acquisition of OMV (Pakistan) Exploration GMBH by Dragon Prime Hong Kong Limited, joint venture between Riaz Bottlers Private Limited and Lotte Chilsung Beverages Co Limited, acquisition of shareholding in Total Parco Marketing Limited by Pak-Arab Refinery Limited and the acquisition of Marshall Gas Private Limited’s liquefied petroleum gas plant by Hascol Petroleum Limited.
Telenor – with its network and infrastructure – is also looking at the next growth segment as mobile broadband penetration is expected to slow down in the next five years. Telenor has a 23% market share in the Next Generation Mobile Services (NGMS) market, which puts it in third place after Jazz (34%) and Zong (29%).