Alibaba seeks to buy back Cainiao as it drops IPO
STORY: Alibaba Group is scrapping plans for a Hong Kong IPO of its logistics unit, Cainiao.
The move is the latest reversal of its massive restructuring plan, which had split the company into six units.
On Tuesday, the Chinese e-commerce giant said it's instead offering up to $3.75 billion to buy out the 36%-stake it does not already own in Cainiao.
Group Chairman Joe Tsai said there was "significant long-term opportunity" in building out a global logistics network, saying the firm had decided to double down on the business.
He also told analysts that regulatory issues played no part in the decision to pull Cainiao's IPO.
The Hong Kong IPO market slowed 56% in 2023 from the year before.
According to sources familiar with the matter, Alibaba had faced a mismatch in valuation expectations with potential investors.
The company did not immediately respond to a request for comments on any such issue.
In a statement, it said it aims to complete the buyback by June or July.
According to Tsai, the company wants to "win in e-commerce by regaining market share and driving growth," adding that further integration with Cainiao is central to that strategy.
