On the evening of March 26th, Alibaba Group announced its plan to acquire minority shareholders and employee equity of Cainiao for $3.75 billion and withdraw Cainiao's listing application. In the future, Cainiao will become an integral part of Alibaba's core business and an important infrastructure for e-commerce, strengthening the coordinated development with Alibaba's e-commerce business; Alibaba will continue to increase its strategic investment in the logistics field and support Cainiao's global expansion.
At the analyst conference that evening, Alibaba Group Chairman Cai Chongxin stated that withdrawing the listing application and acquiring equity were based on two considerations: the group's strategy and the stage of Cainiao's IPO progress.
E-commerce is one of Alibaba's two core businesses, and to provide the most competitive consumer experience, the deep integration of Cainiao and e-commerce business is crucial. "Considering the strategic importance of Cainiao to Alibaba and the significant long-term opportunity of building a global logistics network, we believe that now is the appropriate time for Alibaba to increase investment in Cainiao," said Cai Chongxin.
"For rookies, there will be opportunities in the future to expand their global logistics network and become a leading network in serving global customers through more sustained infrastructure investment," he said, which requires maintaining long-term investment patience and vision.
Cai Chongxin stated that considering Cainiao's strategic role and future plans at Alibaba, as well as the difficulty in reflecting Cainiao's strategic value through IPO under current market conditions, Alibaba has decided to withdraw its application and propose to acquire Cainiao's minority shareholder and employee equity.
On the occasion of the first anniversary of Alibaba Group's organizational transformation, the new management of the group has officially taken over for six months. Cai Chongxin emphasized, "Organizational change has made decision-making more flexible and effective, and has had a significant positive impact on our business. We believe that the effectiveness of organizational change will be reflected in Alibaba's future operations and financial indicators. We have made significant progress in capital management, including exiting non core asset investments, increasing shareholder value through dividend payouts and stock repurchases, etc. In the future, we will continue to improve capital efficiency and enhance shareholder returns."
In the first nine months of fiscal year 2024, Alibaba completed a total of $1.7 billion in non core asset exits. In the natural year of 2023, Alibaba spent $9.5 billion on stock repurchases. Alibaba also distributed its first annual dividend for the fiscal year 2023, with a total dividend amount of approximately $2.5 billion.
In September 2023, Cai Chongxin and Wu Yongming respectively assumed the positions of Chairman and CEO of Alibaba Group. In the past six months, a series of adjustments and positive results have been evident - the strategy has become more focused and clear, the core business team has higher morale, and the younger management team has taken important positions. For strategic core businesses, Alibaba has clearly stated that it will concentrate resources and release growth signals and determination for the future to both internal and external parties.