Alibaba to invest $3.3B to bump its stake in logistics unit Cainiao




Alibaba Singles' Day Global Shopping Festival
Alibaba Singles' Day Global Shopping Festival  

Alibaba is doubling down on its logistics affiliate Cainiao, two years after acquiring a majority stake in the firm. The Chinese giant said today it would invest an additional 23.3 billion yuan (about $3.33 billion) to raise its equity in Cainiao to 63% from 51%.

In a statement, Alibaba said it will subscribe newly issued Cainiao shares in its latest financing round and also purchase equity interest from a certain, unnamed Cainiao shareholder.

Cainiao was co-founded by Alibaba in 2013 to bring organization in Chinese logistics, particularly around e-commerce deliveries. And it has delivered: Today Cainiao powers a significant volume of Alibaba's logistics needs in the nation.

The affiliate, which reported $680 million revenue in the quarter that ended in September, matches riders, deliveries and warehouses, underpinning the logistics side of e-commerce platforms Taobao and Tmall in the same way Alipay underpins the payments side, analysts say.

Department store owner Intime Group, conglomerate Fosun Group, and a number of other logistics firms also own stakes in Cainiao.

In 2017, Alibaba bumped its stake in Cainiao to 51% from 47%, and at the time committed to spend more than 100 billion yuan ($14.3 billion) to expand the logistics business over five years.

The Chinese technology group has tightened its grip on the logistics sector in the nation in recent years. Earlier this year, the company purchased nearly 15% stake of STO Express. As of earlier this year, Alibaba also owned about 10% of ZTO, 11% of YTO, and 27.9% of Best Logistics.

Express delivery and logistics companies are crucial for e-commerce firms, Alibaba said last year. According to the firm, more than 50.7 billion parcels were distributed by e-commerce companies in the nation last year.

COMMENTS

More Related News

David Tepper Bites Into Alibaba, Boosts 3 Positions in 3rd Quarter
David Tepper Bites Into Alibaba, Boosts 3 Positions in 3rd Quarter

Appaloosa manager's top buys include Google parent and chip maker Continue reading...

Alibaba to pay banks up to $32.3 million in fees for Hong Kong listing
Alibaba to pay banks up to $32.3 million in fees for Hong Kong listing

The e-commerce giant employed two co-sponsors, China International Capital Corp (CICC) and Credit Suisse , to head the deal which has been carried out over the past week. The two lead banks were joined by Citigroup Inc , JP Morgan and Morgan Stanley as joint global co-ordinators while HSBC and Industrial and Commercial Bank of China (ICBC) were appointed as junior book runners.

Alibaba Debuts Shares in Hong Kong: BABA Implications
Alibaba Debuts Shares in Hong Kong: BABA Implications

This stock has a lot of upside potential, with the looming trade war being the only hampering its surge.

Alibaba eyes $12.9 bn Hong Kong IPO after setting price
Alibaba eyes $12.9 bn Hong Kong IPO after setting price

Chinese online retail titan Alibaba said Wednesday it could raise almost $13 billion in Hong Kong's biggest IPO for nearly a decade after announcing the pricing of its shares for the mega sale. Asia's biggest company has called the listing a multi-billion-dollar vote of confidence in the city's markets as it is wracked by months of violent protests and the China-US trade war, which have sent its economy into recession. Alibaba said in a statement it set the price for each share at HK$176, which is below the HK$188 indicative ceiling announced last week.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy