Battles in China’s 2016 tech market are won by capital, and Alibaba is gearing up to fight.
The Chinese tech behemoth announced the settlement of a $3 billion USD five-year loan to add fuel to their expansion both locally and abroad. According to an SEC regulatory filing on Wednesday the syndicated loan could even increase according to the company’s demands.
The company has ramped up investments across several major verticals in the beginning of 2016, including online banking, intellectual property, media and entertainment.
Alibaba, along with other local tech giants, have pumped up expenditure as competition stiffens in the maturing Chinese tech sector. The number of cross-border mergers and acquisitions continues to rise through record levels, as Chinese companies seek to build out their businesses globally.
The loan suggests Alibaba will continue to depend heavily on mergers and acquisitions for the foreseeable future. It also points to the limitations of a saturated Chinese market, as acquisitions save the company from the costly localization process when expanding abroad.
The $3 billion USD+ loan will be spread between eight lead arrangers, according to the filing.