Alibaba plans to acquire Cainiao’s remaining 36% stake for $3.7b

Alibaba Group announced on Tuesday that it plans to acquire the remaining 36 per cent stake in Cainiao for up to $3.75 billion, abandoning the initial public offering (IPO) of the logistics business in Hong Kong, Reuters reported.

Alibaba, which currently owns around 64 per cent of Cainiao, sees strategic value in building a global logistics network and believes now is the right time to increase its stake. Chairman Joe Tsai stated that the decision to acquire the remaining shares reflects the importance of Cainiao to Alibaba’s long-term growth strategy.

The company cited unfavourable market conditions as the reason for canceling the IPO plans for Cainiao and other businesses.

Alibaba is offering minority shareholders of Cainiao the opportunity to sell their outstanding shares for $0.62 per share.

The company has undergone significant restructuring in the past year, including appointing a new CEO and refocusing on core businesses.

Cainiao had initially filed for an IPO in September but has now decided to pursue the acquisition by Alibaba. The company will hold a conference call to discuss the Cainiao announcement at 9:30 pm Hong Kong time.