Alibaba Cancels Cainiao IPO

Alibaba Group has announced the withdrawal of its logistics subsidiary, Cainiao Smart Logistics Network Limited's initial public offering (IPO) application on the Hong Kong Stock Exchange. The decision was influenced by the challenging capital market transactions environment in the region. Alibaba currently holds a 64% equity interest in Cainiao, valuing the subsidiary at $10.41 billion.

In a strategic shift, Alibaba intends to integrate Cainiao with its core e-commerce operations to regain market share and stimulate growth. The company is also investing in infrastructure to expand Cainiao’s global network. This includes a reduction in delivery times to three days from five for certain markets, including the U.S.

Alongside the IPO withdrawal, Alibaba has proposed to buy out all of Cainiao's minority shareholders and employees for up to $3.75 billion. This offer accounts for just 4% of Alibaba's cash, cash equivalents, short-term investments, equity securities, and other investments in the current assets as of the end of last year. Alibaba plans to provide updates on regular share buybacks and will review its dividend policy in May, with the aim to return capital to shareholders.

The company's new management structure has resulted in more efficient decision-making regarding its reorganization. Management expects positive impacts on operational and financial metrics in the future. Despite market challenges, Alibaba anticipates the Cainiao repurchase to conclude before June/July.