Alibaba Group Holdings, a Chinese e-commerce giant, is in negotiations with its major stakeholders to reclaim a stake in its affiliated payment services company, Alipay.
The move is expected to increase Alibaba’s value, ahead of its much-anticipated initial public offering that is expected to gross over $20bn.
Even if the talks result in a successful deal, the agreement would face regulatory review in China and is not likely to happen before the IPO, reported The Wall Street Journal.
Earlier in 2011, Alipay was divested from the main group. The company then said the spinoff was crucial for its payments business’ operations under the new Chinese government regulations.
Alibaba founder Jack Ma holds a 46% stake in the parent company of Alipay.
Alipay plays a key role in Alibaba’s operations since it manages the company’s e-commerce payments.
A source familiar with the development was quoted by Bloomberg as saying that the e-commerce major is intending to take up nearly one-third stake in Alipay.
Alipay has also embarked on Chinese money-market fund and manages assets worth $87bn.
The addition of the affiliate could be in favour of Alibaba’s shareholders keen to leverage former’s growth in both payments and financial services.