Ant Group, led by Jack Ma, is making a strong comeback in the financial sector as it competes with Citadel Securities to acquire Credit Suisse’s Chinese banking business. This move comes after Beijing’s easing of its crackdown on tech companies, signaling that Ant Group is ready to revisit its prior ambitions.
According to reports, Ant Group has outbid Citadel Securities to purchase Credit Suisse’s Chinese investment banking venture from UBS. Although the exact amount of the bid has not been disclosed, if approved by regulators, Ant Group plans to use the licenses initially granted to UBS to build its own securities business. This acquisition would allow the Alipay owner to expand its presence in the financial industry.
The Chinese government, however, prefers to see Credit Suisse’s venture sold to a foreign buyer, aligning with the original intention of opening up the country’s financial sector to international players. UBS, as the seller, now faces a decision between Citadel Securities’ offer, which has a better chance of being approved, and Ant Group’s higher bid.
Citadel Securities, founded by U.S. billionaire Ken Griffin in 1990, was the only foreign company to submit a bid for the Chinese venture before Ant Group’s entry. It offered to pay around ¥1.5- ¥2 billion ($208- $277 million) for the business in December. Now, with Ant Group’s bid on the table, UBS must weigh the options and decide which offer to accept.
This development comes after a lengthy crackdown on China’s tech sector by Beijing. The regulatory measures aimed to address alleged monopolistic practices and brought significant losses to China’s top technology companies. Ant Group was particularly affected when its initial public offering was quashed in November 2020. The move sent shockwaves through the global investment world.
However, with the end of the regulatory crackdown and the imposition of a $985 million fine on Ant Group by the Chinese central bank and securities regulator in July 2023, the company seems ready to move forward with its ambitions. Prior to the crackdown, Ant Group had plans to establish its own securities business, and this recent bid for Credit Suisse’s Chinese banking business indicates a revival of those plans.
Both Ant Group and Citadel Securities were approached for comment but have yet to respond.
Overall, the competition between Ant Group and Citadel Securities for Credit Suisse’s Chinese banking business showcases the resurgence of Ant Group in the financial sector. After facing setbacks due to regulatory actions, Jack Ma’s company is now back in the game and ready to pursue its ambitions. With the easing of the crackdown on tech companies, this acquisition would provide Ant Group with a significant opportunity to expand its presence in the Chinese financial industry. The final decision now lies with UBS, who must choose between Citadel Securities’ offer, which has a higher chance of approval, and Ant Group’s higher bid.
