Alibaba, a Chinese e-commerce company, announced on Tuesday that it would spin off Cainiao Smart Logistics Network, its logistics division, in a Hong Kong IPO, making it the first business unit to go public following a significant reorganization.
In a filing, Alibaba stated that it had submitted a spin-off plan to the Hong Kong Stock Exchange and had gotten approval to move forward.
Alibaba will keep its controlling stake in Cainiao, owning more than 50% of the business, and will continue to operate it as a subsidiary. Currently, the corporation holds a stake of around 70% in Cainiao, the primary delivery division of Alibaba that manages logistics and packages for both Chinese and international retailers.
Approximately six months after first announcing that it would divide its operations into six distinct companies, Alibaba has now made the decision.
The other five business areas, which include cloud computing and logistics, will be permitted to raise outside funding or be spun off to the public in order to create flexibility and increase shareholder value.
The Cainiao IPO would be the first initial public offering for an Alibaba business unit.
The company just underwent a shift in leadership, with new CEO Eddie Wu taking the helm from Daniel Zhang earlier this month.
Zhang, who had previously resigned as CEO in order to concentrate on leading Alibaba’s cloud division, has also quit his post at Alibaba Cloud in order to launch a new investment fund that is funded by Alibaba.
