Alibaba makes additional payment of $807mn to take controlling stake in Cainiao
Alibaba Group has agreed to make an additional investment of $807mn to increase its ownership of Cainiao, the logistics affiliate of Alibaba, to a majority stake of 51%.
Alibaba also announced its intention to invest $15.2bn over the next five years to further strengthen its global logistics network that aims to realise 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 $15.2bn 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.
“Our goal with this investment is to provide comprehensive, first-class experience for consumers globally,” said Daniel Zhang, CEO of Alibaba Group.
“Our commitment to Cainiao and additional investment in logistics demonstrate Alibaba's commitment to building the most-efficient logistic network in China and around the world.
“By enhancing the logistics capabilities within the Alibaba ecosystem and extending our investment in this sector, we are further enabling our New Retail strategy to bring online and offline retail into one seamless experience for shoppers.
“We will also continue to deepen our collaboration with various logistics partners to achieve this goal.”
This transaction is expected to be completed in October 2017.