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Alibaba Group Holding has announced that it had scrapped plans to list its logistics unit Cainiao in Hong Kong.
Alibaba stated that it was withdrawing its IPO and listing application, proposing instead to purchase all outstanding shares of Cainiao Smart Logistics Network. I Photo: Cainiao Group
This decision comes as the company looks to prioritize growing its e-commerce business amidst challenging IPO market conditions, reported Zen Soo for the Associated Press (AP).
Alibaba stated that it was withdrawing its IPO and listing application, proposing instead to purchase all outstanding shares of Cainiao Smart Logistics Network.
The repurchase offer will value Cainiao at $10.3 billion. Currently, Alibaba holds a 64% stake in the logistics unit, and the buyout offer will allow minority shareholders to sell their shares to Alibaba.
“Given the strategic importance of Cainiao to Alibaba and the significant long-term opportunity we see in building out a global logistics network, we believe this is an appropriate time to double down on Alibaba’s investment in Cainiao,” said Joe Tsai, chairman of Alibaba Group.
The company also noted that current market conditions would "unlikely garner a valuation" that reflects Cainiao’s strategic value to Alibaba’s business.
