Alibaba Group has agreed to make an additional investment of USD807 million to increase its ownership of Cainiao Smart Logistics Network Limited (“Cainiao”), the logistics affiliate of Alibaba, to a majority stake of 51%.
Alibaba also announced its intention to invest USD15.2 billion over the next five years to further strengthen its global logistics network that aims to realize its mission of fulfilling orders in China within 24 hours and within 72 hours anywhere in the world. These investments are expected to enhance the overall logistics experience for consumers and merchants across the Alibaba ecosystem, as well as to enable greater efficiencies and lower costs in China’s logistics sector.
Upon completion of the transaction, Alibaba’s stake in Cainiao will increase from 47% to 51%, and Alibaba will gain one additional new seat on Cainiao’s board of directors, increasing its board representation to four out of seven seats.
The additional investment of USD15.2 billion over the next five years will be used to increase R&D in logistics data technology, as well as for development of smart warehousing, smart delivery and global logistics infrastructure, all of which are core to building the global logistics network of the future.
This transaction is expected to be completed in October 2017, subject to satisfaction of customary closing conditions. Following the completion of the transaction, financial results of Cainiao will be consolidated under Alibaba Group and reported as part of the core commerce business segment.
Credit Suisse acted as financial advisor to Alibaba and Morgan Stanley acted as financial advisor to Cainiao.
About Alibaba Group
Alibaba Group’s mission is to make it easy to do business anywhere. The company aims to build the future infrastructure of commerce. It envisions that its customers will meet, work and live at Alibaba, and that it will be a company that lasts at least 102 years.
About Cainiao Network
Cainiao Network is dedicated to meeting the current and future logistics demands of China’s online and mobile commerce sector. It operates a logistics data platform that leverages the capacity and capabilities of logistics partners to fulfill transactions between merchants and consumers at a large scale. It also uses data insights and technology to improve efficiency across the logistics value chain. Cainiao Network is an affiliate of Alibaba Group.