Alibaba has offered to buy the remaining 36% of its logistics subsidiary Cainiao Smart Logistics Network Limited for up to US$3.75bn after Cainiao withdrew its initial public offering and listing application on the Hong Kong Stock Exchange.
Cainiao minority shareholders, including employees, can sell all of the outstanding shares of Cainiao held by them to Alibaba Group for US$0.62 per share – amounting to a total of US$3.75bn – or continue to own Cainiao shares. The offer was discussed during a conference call held on March 26.
After completion of the offer, Alibaba Group said it plans to align part of Cainiao’s business to “better realize strategic synergies” with Taobao and Tmall Group and Alibaba International Digital Commerce Group, and support Cainiao to execute a long-term strategic expansion of its global logistics network.
“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,” Alibaba Group chairman Joe Tsai told Reuters.
Alibaba Group currently owns approximately 64% of the fully-diluted equity interest in Cainiao.