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Alibaba To Invest $807 Mln In Cainiao; To Invest $15.2 Bln In Logistics Network

Alibaba Group Holding Limited (BABA) announced late Monday that it has agreed to make an additional investment of 5.3 billion Chinese yuan or $807 million to increase its ownership of logistics affiliate Cainiao Smart Logistics Network Ltd. to a majority stake of 51%.

Alibaba also announced its intention to invest 100 billion yuan or $15.2 billion over the next five years to further strengthen its global logistics network.

According to the firm, the move is a further step to implement its New Retail strategy.

Alibaba said its global logistics network aims to realize its mission of fulfilling orders in China within 24 hours and within 72 hours anywhere in the world.

Upon completion of the transaction, Alibaba's stake in Cainiao will increase to 51% from 47%, and Alibaba will gain one additional new seat on Cainiao's board of directors, increasing its board representation to four out of seven seats.

The additional investment of $15.2 billion over the next five years will be used to increase R&D in logistics data technology, as well as for development of smart warehousing, smart delivery and global logistics infrastructure.

This transaction is expected to be completed in October 2017, subject to satisfaction of customary closing conditions.

Following the completion of the deal, financial results of Cainiao will be consolidated under Alibaba Group and reported as part of the core commerce business segment.

Credit Suisse acted as financial advisor to Alibaba and Morgan Stanley acted as financial advisor to Cainiao.

by RTT Staff Writer

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