Trainee reporter Wen Yan
On March 26, Alibaba announced that its logistics subsidiary, Cainiao Smart Logistics Network Co., Ltd. ("Cainiao"), had withdrawn its initial public offering and listing application on the Hong Kong Stock Exchange.
At the same time, Alibaba plans to make an offer to Cainiao's minority shareholders, including employees, to sell all of its issued shares in Cainiao to Alibaba Group at a price of US$0.62 per share, for a total consideration of up to US$3.75 billion.
What is Alibaba's consideration in withdrawing Cainiao's Hong Kong IPO application?
Strengthen the core business of e-commerce and logistics synergy
In May 2023, Alibaba announced a comprehensive asset restructuring plan, including an IPO for Cainiao.
At that time, Alibaba believed that a separate listing would better reflect the value of Cainiao as an important business of Alibaba.
Now the situation has changed. Alibaba said that after comprehensive consideration, the current IPO cannot highlight the intrinsic value of Cainiao as a global e-commerce logistics leader.
"Given the strategic importance of Cainiao to Alibaba, and the significant long-term opportunities we see in building our global logistics network, we believe now is the right time for Alibaba to increase its investment in Cainiao," said Joe Tsai, Chairman of Alibaba's Board of Directors. ”
Cainiao is an integral part of Alibaba's core business and an important infrastructure for e-commerce development. It is reported that Cainiao's withdrawal of the Hong Kong stock IPO application highlights Alibaba's confidence in strengthening the synergy between its core e-commerce business and logistics business, as well as its strategic investment in logistics in the future.
According to public information, Cainiao was founded in 2013 and has built a world-leading smart logistics network in the past ten years. In Alibaba's latest quarterly earnings report, Cainiao's quarterly revenue increased by 24% year-on-year.
According to public information, Cainiao is currently one of the world's largest cross-border e-commerce logistics companies, handling more than 1.5 billion cross-border e-commerce parcels annually.
Issuance of an offer of up to US$3.75 billion
At the time of withdrawing the application for the IPO of Cainiao's Hong Kong stocks, Alibaba threw out another offer plan.
Alibaba Group, which owns approximately 63.7% of Cainiao's fully diluted shares, including vested interests under Cainiao's employee stock ownership plan, will provide up to US$3.75 billion in cash for the tender offer to acquire all of Cainiao's minority shareholders and employees' attributable shares.
The Cainiao Employee Share Purchase Plan will be executed in August 2024, and employees will be able to voluntarily sell all Cainiao shares vested on or before August 1, 2024.
Following the completion of the above-mentioned offer, Alibaba plans to adjust some of Cainiao's businesses to better achieve strategic synergies with Taotian Group and Alibaba International Digital Business Group, and support Cainiao's long-term strategic expansion of its global network.
"This strategic adjustment to the rookie is consistent with Alibaba's strategic priorities. Alibaba said that the above-mentioned acquisition strength shows Alibaba's confidence in being optimistic about rookies and its determination to continue to invest.
Since taking office in September 2023, Alibaba's new management team has rapidly strengthened its core business focus and carried out a comprehensive organizational governance upgrade.
"Organisational change has made decision-making more flexible and effective, which has had a significant positive impact on our business. We believe that the effectiveness of organizational change will be reflected in Alibaba's future operational and financial metrics. ”
Alibaba said that the company has made significant progress in capital management, including exiting non-core asset investments, increasing shareholder value through dividends and share buybacks, etc., and will continue to improve capital efficiency and enhance shareholder returns in the future.
Editor: Captain
Review: Xu Wen