Tik Tok plans to acquire Linked Commerce for 1.4 billion yuan, or it will fill the short board of offline scene acquiring business | Dachang Finance.

Eight years after Hailian Jinhui bought Linked Commerce for more than 1 billion yuan, this fully qualified payment license may be sold to Tik Tok for nearly 1.4 billion yuan.

On the evening of April 3, Hailian Jinhui (002537.SZ) announced that the company had signed the Equity Transfer Agreement with Tianjin Tongrong E-Commerce Co., Ltd., and planned to link its wholly-owned subsidiary with Advantage Technology Co., Ltd.(hereinafter referred to as "linkage advantage")100% equity of Linked Advantage Electronic Commerce Co., Ltd. (hereinafter referred to as Linked Commerce) was transferred to Tianjin Tongrong.    

In terms of transaction price, referring to the appraisal report issued by Shanghai Dongzhou Assets Appraisal Co., Ltd., the appraisal value of all shareholders’ equity of Linked Commerce as of the appraisal base date is 1.382 billion yuan, and the price of this equity transfer is set as: the benchmark transfer consideration of 750 million yuan+the adjusted amount of net assets ("net assets consideration", the net assets of Linked Commerce on the appraisal base date is 649 million yuan) based on the consolidated statement of the equity delivery date of the target company.

The announcement also revealed that as early as January 2016, the company purchased 91.56% equity of Linkage Advantage by issuing shares, of which the transaction price of Linkage Commercial Assets Group was 1.063 billion yuan. On July 14, 2016, the equity delivery procedures were completed, and Linkage Advantage became a wholly-owned subsidiary of the company.

After the completion of this transaction, linked commerce will no longer be included in the scope of consolidated statements of Hailian Jinhui; Tianjin Tongrong intends to merge Linked Commerce through its wholly-owned subsidiary Wuhan Hezhong Yibao Technology Co., Ltd. (referred to as "Hezhong Yibao") after completing the equity delivery of the transferred Linked Commerce. The announcement emphasizes that the above transactions and mergers need to be approved by the central bank.

According to public information, Wuhan Hezhong Yibao Technology Co., Ltd. is the main body of the "Tik Tok Payment" license. According to the eye inspection, after the penetration, Hezhong Yibao holds 99% of the shares, and the other 1% is held by Zhang Lidong, the chairman of ByteDance.

This means that if the transaction is completed, Tik Tok will once again obtain a payment license through an affiliated company at a price of about 1.4 billion yuan.

Regarding this transaction, the relevant person in charge of Tik Tok Payment said that the transaction is to support offline transaction scenarios such as life service and provide more convenient payment and service experience for users and businesses in the Tik Tok system.

According to the interface journalist, as early as August 2020, Tik Tok had acquired a payment license-Wuhan Hezhong Yibao Technology Co., Ltd. through its affiliated company, and launched Tik Tok Payment. However, Hezhong Yibao’s licensed business type is only "Internet Payment", lacking the offline bank card acquiring business type. The business types of Linkage Advantage E-Commerce Co., Ltd. acquired this time include Internet payment, mobile phone payment and bank card acquiring business nationwide, and its license renewal was also approved by the central bank in January 2024.

Wang Pengbo, an analyst with Broadcom Consulting, said that the reason why Tik Tok acquired Linked Commerce was to supplement the offline bank card acquiring license. With the payment license that was only qualified for online payment, Tik Tok has set up a complete payment system online. After obtaining the qualification of offline bank card acquiring, Tik Tok Payment can further expand the payment business offline, cooperate with life service and other businesses, make up the closed-loop business, reduce the channel cost, and further strengthen the control of offline merchants.

At the same time, he also said that although the license qualification of Linked Commerce is very complete, the licensed company has been punished by the central bank many times before, and whether Linked Commerce has a complete offline entity merchant network needs to be verified. Generally speaking, payment institutions prefer to acquire more pure payment institutions without business, and it is easier to start work in time without historical burden.

According to the data, in 2018, Linked Commerce was fined more than 26 million yuan for illegal transactions, providing online payment services and transferring domestic foreign exchange abroad in violation of regulations. In July 2021, Linked Commerce also received a fine from the Business Management Department of the People’s Bank of China, and was fined 7.61 million yuan for four violations. Gao Zhangpeng, then executive director of Linked Advantage and head of the anti-money laundering working group, and Huang Rong, then president of the company and head of the anti-money laundering working group, were fined 98,000 yuan and 83,000 yuan respectively.

Wang Pengbo also pointed out that in terms of compliance, according to the Regulations on the Supervision and Administration of Non-bank Payment Institutions, the same shareholder may not directly or indirectly hold more than 10% equity of two or more non-bank payment institutions of the same business type; The same actual controller may not control two or more non-bank payment institutions of the same business type. According to the new regulations, Tik Tok may still need to further integrate its payment licenses.

He said that from the perspective of industry influence, in the short term, Tik Tok needs to consider integrating payment institutions that have already cooperated with Tik Tok in offline local life business, and balance the interests between self-operated and aggregated service providers; In the long run, it is very likely that Tik Tok will further change the market share of existing offline acquirers through subsidies and other means.