By Scott Murdoch and Julie Zhu

HONG KONG (Reuters) – Ant Group’s $35 billion initial public offering (IPO) is unlikely to suffer from any U.S. restrictions on the Chinese financial technology giant due to its very limited overseas presence, potential investors and analysts said.

U.S. President Donald Trump is considering curbs on Ant, an affiliate of Chinese e-commerce firm Alibaba

, and Tencent <0700.HK> over concerns their payment platforms threaten national security, Bloomberg News reported on Wednesday.

If implemented, the restrictions would illustrate how Trump’s administration is seeking to prevent Chinese companies from embedding themselves in the U.S. financial system before they become a significant competitive threat.

Ant said it was not aware of any discussions within the administration about restrictions. Tencent and the White House did not immediately respond to requests for comment.

Ant is working towards a dual-listing in Shanghai and Hong Kong possibly as soon as this month in what sources have said could be the world’s largest IPO, surpassing oil giant Saudi Aramco’s <2222.SE> $29.4 billion float in December.

Ant’s Alipay and Tencent’s WeChat payment platforms are used primarily by Chinese citizens with accounts in renminbi. Most of their U.S. interactions are with merchants accepting payments from Chinese travelers and businesses in the country.

“Basically the overseas revenue accounts for maybe 5% or less for Ant Group. That means for the U.S. revenue contribution it would be even less than that,” said Morningstar senior equity analyst Chelsey Tam.

“I’m sure investors will ask about it during the roadshow but it’s quite easy for investors to understand that if Alipay and Wechat Pay go overseas the U.S. is probably not the top priority,” Tam said.

Ant, which makes 95% of its revenue in China, is seeking to raise about $35 billion in an IPO after assessing early

(Bloomberg) — The Trump administration’s potential restrictions on two Chinese payments giants would reverberate far beyond politics, potentially affecting multibillion-dollar deals, shaking up international commerce and even shaping the evolution of the global financial system.



a person sitting on display in a store: An advertisement for Tencent Holdings Ltd.'s WeChat Pay digital payment service is displayed outside a restaurant in Hong Kong, China, on Tuesday, Sept. 1, 2020. WeChat Pay and Ant Group's Alipay account for the majority of the mobile payments transactions in China.


© Bloomberg
An advertisement for Tencent Holdings Ltd.’s WeChat Pay digital payment service is displayed outside a restaurant in Hong Kong, China, on Tuesday, Sept. 1, 2020. WeChat Pay and Ant Group’s Alipay account for the majority of the mobile payments transactions in China.

U.S. officials have stepped up behind-the-scenes talks in recent weeks about possibly restricting the expansion of Ant Group’s Alipay and Tencent Holdings Ltd.’s WeChat Pay over concerns that the digital payment platforms threaten national security, Bloomberg reported on Wednesday.

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Read more: U.S. explores curbs on Ant Group, Tencent payment systems

If the administration proceeds, the most immediate hit would be to Ant Group’s plan for a stock listing in Shanghai and Hong Kong, a deal that could rank as the world’s largest initial public offering. Some international companies have been working with the payment apps and could see those strategies hurt or derailed. And while restrictions may ultimately head off potent competitors to U.S. and European banks, it could also — depending on how China responds — thwart their own planned expansion into the world’s second-largest economy.

Here’s a breakdown of the many companies with business at stake as President Donald Trump’s administration weighs its decision:

Ant’s IPO

Investors have been eager to pile into Jack Ma’s Ant Group. After gauging early interest, the company is seeking to raise at least $35 billion in its IPO, people familiar with the matter have said, potentially topping Saudi Aramco’s record $29 billion sale. Ant lifted the target based on an increased valuation of about $250 billion, which would exceed the market