INTERNATIONAL - Alibaba Group Holding Ltd. will spend $3.3 billion to raise its stake in Cainiao, in an effort to exert more control over the logistics subsidiary that underpins its sprawling e-commerce empire.
The Hangzhou-based company will lift its stake in Cainiao to 63 percent from 51 percent by subscribing for newly issued shares in its latest financing round and buying existing stock from another holder, the company said on Friday.
Six-year-old Cainiao is the rapidly growing business that sits at the heart of Alibaba’s expansion -- both in China and abroad. It oversees a coterie of at least a dozen shipping partners, orchestrating deliveries carried out by millions of people across the country.
The increased stake could help Alibaba expand deeper into the business of setting up and controlling its own infrastructure, much like Amazon.com Inc. Billionaire Jack Ma said in May last year that he wanted to invest 100 billion yuan ($14 billion) in logistics without giving a time frame.
Cainiao’s revenue, after elimination of inter-company transactions, rose 48 percent to 4.8 billion yuan in the quarter ended September.