Alibaba cancelled its intended Hong Kong initial public offering (IPO) for its logistics division, Cainiao. Alibaba intends to pay up to $3.75 billion for Caniao shares that it does not already own in order to raise its 64% holding position to 100%. Cainiao is valued at $10.3 billion according to the remaining stock acquisition offer made to employees and minority investors. Cainiao is essential to the Alibaba’s plan to “win in e-commerce by regaining market share and driving growth,” according to Alibaba chairman Joe Tsai.
By further merging Alibaba’s e-commerce and Cainiao’s logistics services, the deal would create more competitive and efficient operation through synergy, improving customer experience. This decision comes after also Alibaba halted its initial proposal to sell off its cloud division four months ago.
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