Alibaba will split into six parts and prepare for their IPO
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The Chinese Alibaba Group plans to split its business into six parts, each of which will prepare for an initial public offering “when the moment is right.” This information is provided by the agency. Bloomberg referring to a statement he received from Alibaba CEO Daniel Zhang. This is Alibaba’s biggest business reorganization since its inception over 20 years ago.
The six business groups Alibaba plans to split into include Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group and Digital Media, and Entertainment Group. Each of the divisions will have its own CEO and board of directors. Daniel Zhang will remain chairman and CEO of Alibaba Group, which will retain its holding model. In addition, Mr. Zhang will lead the Cloud Intelligence Group.
Each division will have the opportunity to raise funds from third-party companies and conduct an IPO. The only exception is Taobao Tmall Commerce Group, which is responsible for Alibaba’s China trading business, which will remain 100% owned by Alibaba Group. The purpose of the reorganization, according to Mr. Zhang, is to make Alibaba Group more flexible, reduce decision-making and response time. According to Stuart Cole, economics expert at brokerage Equiti Capital, “Alibaba has long wanted to make these moves, but it seems to have been waiting for the right opportunity.” As he told Reuters, this reorganization “will really add an element of flexibility and adaptability to a company that is now such a heavyweight.” Alibaba shares on the stock exchange in Hong Kong fall on the background of the news by 1.17%. They have lost over 8% in the last month.
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