75 Billion to Minority Shareholders

Alibaba Group Holding Limited and its logistics subsidiary, Cainiao Smart Logistics Network Limited, have announced the withdrawal of Cainiao's initial public offering (IPO) and listing application on the Hong Kong Stock Exchange. As part of this strategic shift, Alibaba Group has proposed an offer to Cainiao's minority shareholders, including its employees, allowing them to sell their shares to Alibaba Group at $0.62 per share, with a total consideration valued at up to $3.75 billion.

Shareholders have the option to accept the cash offer or retain their shares in Cainiao. Alibaba Group currently holds a majority stake of approximately 63.7% in Cainiao's fully diluted equity interest, including vested interests from Cainiao's employee share ownership plan.

The integration of Cainiao with Alibaba Group's core e-commerce platforms-Taobao, Tmall Group, and Alibaba International Digital Commerce Group-will be a primary focus for the company after completing the offer. This integration aims to enhance strategic synergies and support Cainiao's long-term goal of expanding its global logistics network.

To provide further details on this strategic shift and its implications, Alibaba Group has scheduled a conference call for Tuesday, March 26, 2024.

In another development, Alibaba Group has decided to temporarily halt its nine-year-old sourcing platform, Ling Shou Tong (LST), starting March 30. LST aimed to digitize supply, inventory, and logistics for small convenience stores. The company cites "business adjustments" as the reason for this pause. However, LST will continue to fulfill existing orders and provide after-sales service during this period.

Alibaba has made it clear that LST will not be closing or integrating with 1688, its wholesale platform.

In premarket trading on Tuesday, March 26, 2024, BABA shares were observed to trade higher by 0.39% at $71.73.

Alibaba's decision to withdraw the Cainiao IPO and offer a cash deal to its minority shareholders showcases the company's commitment to strengthening strategic partnerships and realizing its long-term goals in the logistics sector.