Alipay, a Chinese third party online payment platform, are rumoured to be buying a 25 per cent stake in Micromax, in a deal that could be worth $5bn.
Micromax is India’s largest internal manufacturer of mobile phones. Alipay is one of China’s biggest online payment solution firms and is part of the Alibaba Group.
According to The Times of India, Micromax’s board are in disagreement as to the direction of the company, but an investment from Alipay could move Micromax more into mobile payments in order to keep up with Samsung and Xiaomi.
Both Micromax and Alipay have refused to comment on the potential acquisition, however Micromax released an internal statement on behalf of their chairman, Sanjay Kapoor.
‘‘Micromax board and management work under clear principles of consensus, and they are working cohesively (on all strategic & operational issues) with complete unanimity to build Micromax’s leadership in all our markets,’’ said the statement.
Alipay are not the first Chinese company to purchase shares of Micromax. In March 2012, semiconductor provider Spreadtrum communications invested $10m in the Indian firm for a minority share.
Micromax could soon become a major player in the mobile payment industry. If a potential deal eventually becomes a reality, Alipay could merge two of their acquisitions together. Recently Alipay paid $575m for a large stake in Paytm, a mobile payment and commerce platform who could provide Micromax with mobile payment solutions.
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