Alibaba Halts Ling Shou Tong Operations, Proposes $3.75B Cainiao Share Purchase Amid Global Expansion Plans

Alibaba Group Holding Limited BABA and its logistics subsidiary, Cainiao Smart Logistics Network Limited, announced the withdrawal of Cainiao’s initial public offering and listing application on the Hong Kong Stock Exchange. 

Concurrently, Alibaba Group has proposed an offer to Cainiao’s minority shareholders, including its employees, allowing them to sell their shares to Alibaba Group at $0.62 per share, valuing the total consideration at up to $3.75 billion. 

Shareholders can accept this cash offer or retain their shares in Cainiao. 

Also Read: Alibaba Invests $1.1B in South Korea to Boost Logistics

Alibaba Group holds approximately 63.7% of Cainiao’s fully diluted equity interest, including vested interests from Cainiao’s employee share ownership plan.

After completing this offer, Alibaba Group aims to integrate Cainiao more closely with its core e-commerce platforms—Taobao, Tmall Group, and Alibaba International Digital Commerce Group—to enhance strategic synergies. 

This integration will likely support Cainiao’s strategic goal of expanding its global logistics network over the long term. 

Alibaba Group has scheduled a conference call for Tuesday, March 26, 2024 to further elaborate on this strategic shift and its implications. 

Alibaba is temporarily halting its nine-year-old sourcing platform, Ling Shou Tong (LST), which aims to digitize supply, inventory, and logistics for small convenience stores, starting March 30. 

The company cites “business adjustments” as the reason for this pause, during which LST will still complete existing orders and provide after-sales service.

Despite this suspension, Alibaba has made it clear that LST will not be closing or integrating with 1688, Alibaba’s wholesale platform.

The stock lost over 17% in the last 12 months. Investors can gain exposure to the stock via Invesco Golden Dragon China ETF PGJ and ProShares Online Retail ETF ONLN.

Price Action: BABA shares traded higher by 0.39% at $71.73 premarket on the last check Tuesday.

Also Read: Alibaba Seeks Growth Beyond China, Strategic Alliances in Gulf Countries Mark a New Chapter for Tech Giant

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.