Alibaba to expand stake in logistics affiliate Cainiao

The China-based e-commerce marketplace revealed its intentions to invest 100 billion Chinese Yuan Renminbi (U.S. $15.2 billion) over the next five years to expand its logistics network, and its plans to up its stake in Cainiao next month.    Alibaba Group Holding Ltd. is making a 5.3 billion Chinese Yuan Renminbi (U.S. $807 million) investment to increase its ownership of Cainiao Smart Logistics Network Ltd. from 47 percent to a majority stake of 51 percent.
   The transaction is expected to be finalized in October, subject to satisfaction of customary closing conditions, Alibaba said.
   Cainiao is the logistics affiliate of China-based e-commerce marketplace Alibaba.
   For the quarter ending June 30, Cainiao’s platform enabled the delivery of an average of 55 million packages per day on Alibaba’s China retail marketplaces.
   Upon completion of the transaction, Alibaba will gain one additional new seat on Cainiao’s board of directors, increasing its board representation to four out of seven seats.
   In addition, Cainiao’s financial results will be consolidated under Alibaba Group and reported as part of the core business segment.
   Credit Suisse acted as financial advisor to Alibaba, while Morgan Stanley served as financial advisor to Cainiao.
   Alibaba also revealed its intentions to invest RMB 100 billion over the next five years to further strengthen its global logistics network.
   The investment will be used to increase research and development in logistics data technology, as well as for the development of smart warehousing, smart delivery and global logistics infrastructure.
   Overall, Alibaba has been thriving financially, with net income for the quarter ending June 30 skyrocketing 96 percent year-over-year to RMB 14 billion, while revenues shot up 56 percent to RMB 50.2 billion. The company closed out the quarter with a total of 57,302 employees.