Hailian Jinhui reported on Wednesday (30) that it ended the sale of Linkage Advantage Payment to Tianjin Tongrong, a company linked to the ByteDance ecosystem in China. The transaction, announced in 2024, did not obtain the necessary approval from the authorities and ended on September 29, without transfer of control of the company.
Tianjin Tongrong controls the structure linked to Douyin Pay, the payments service of Douyin, the Chinese sister platform of TikTok. The acquisition would give the group an additional structure for payments, especially in in-person transactions and local services.
The agreement provided for a basic payment of 750 million yuan, plus the company's adjusted net equity at closing. More than two years later, Hailian Jinhui reported that the transaction remained without authorization from the competent authority and therefore did not meet the necessary conditions for the transfer of the shares.
Linkage Advantage's license also faces regulatory uncertainty
Linkage Advantage's situation has become more uncertain in recent weeks. On August 28, the People's Bank of China suspended the review of the renewal of its payments license based on Article 24 of the applicable administrative rules.
The suspension does not amount to a final rejection. Hailian Jinhui stated that the company can continue operating under this condition and that it will seek to resume the process when the reason for the suspension disappears.
The end of the acquisition prevents, for now, the ByteDance ecosystem from incorporating an operation that could expand its presence in card payment acquiring and local services transactions in China.
For Hailian Jinhui, the termination of the sale should not directly generate profit or loss related to the transaction. The company will continue operating Linkage Advantage.
There is, however, a financial effect. A related party to Tianjin Tongrong had granted 60 million yuan in loans to Linkage Advantage and agreed to forgive principal and interest.
Hailian Jinhui estimates that the measure will add about 60 million yuan to net profit, an amount still subject to the annual audit and tax treatment.
