Cainiao Smart Gateway. Photo: Alibaba
E-commerce giant Alibaba Group has decided to cancel plans to place its logistics subsidiary on the Hong Kong Stock Exchange and withdrawn its initial public offering (IPO).
Alibaba said that the move would allow it to align Cainiao to realise strategic synergies with online shopping platforms Taobao and Tmall Group and Alibaba International Digital Commerce Group as well as “support Cainiao to execute a long-term strategic expansion of its global logistics network”.
As well as withdrawing the IPO plans, Alibaba said that it planned to offer to buy all shares in the company from minority holders.
The Group will offer $0.62 per share, representing a total consideration of $3.6bn.
“Cainiao shareholders may choose to accept the offer and sell their shares to Alibaba Group for cash consideration or continue to own Cainiao shares,” the company said.
Alibaba Group owns approximately 63.7% of the fully-diluted equity interest in Cainiao.
Reports suggest a Hong Kong market slump may also have played a role.
It is the second IPO the company has cancelled after withdrawing its plans for its cloud unit.
The company filed for the IPO in September last year. It hoped to raise as much as $1bn through the IPO.
The move was part of efforts to restructure the company that will split its business into six units each to be managed by its own chief executive and board of directors.
This would allow the units to raise funds through share offerings, the company said.
Cainiao was expected to be the first of the units to go public.
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