E-commerce group Alibaba agreed yesterday to pay RMB5.3bn ($798m) to raise its stake in China-based logistics affiliate Cainiao Smart Logistics Network from 47% to 51%.
Cainiao was formed in 2013 by Alibaba, which held a 48% stake at the time of its formation, together with diversified conglomerate Fosun and retail chain Intime Retail Group.
The company operates a logistics platform that coordinates delivery and warehousing for e-commerce operators including Alibaba, and uses third-party partners to fulfil the groundwork.
Alibaba made the investment in advance of a $15bn initiative that will involve it beefing up its global logistics capabilities and technology over the next five years. It will get another seat on Cainiao’s board of directors through the deal, and will hold four out of the company’s seven seats.
Daniel Zhang, chief executive of Alibaba, said: “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.”
Cainiao had previously raised $1.54bn from Singaporean state-owned firms Temasek Holdings and GIC, the Malaysian government-owned Khazanah Nasional and China-based investment firm Primavera Capital in March 2016, at a reported $7.7bn valuation.
Credit Suisse was financial advisor for Alibaba in the transaction while Morgan Stanley advised Cainiao. The deal is expected to close next month.