Alibaba Group Holding is planning to split its business into six main units spanning e-commerce, media and cloud, the company said Tuesday, adding that each of the units will explore fundraising or initial public offerings in the bag.
Alibaba’s US-listed shares were up 3.5% in pre-market trading.
The six units will 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 them will be directed by its own executive president and its board of directors.
daniel zhang He will remain chairman and chief executive of Alibaba Group, which will follow a holding company management model, the company said in a statement. Zhang will also be CEO of Cloud Intelligence Group, as previously announced.
“I’m not sure how quickly Alibaba could break up. I’m sure they’ve worked on it before announcing it, but it seems like a pretty big job to create six companies from one. But it injects an element of flexibility and adaptability into the company, which is now something of a giant,” Stuart Cole, chief macro economist at Equiti Capital, London, told Reuters.
“And it will allow the six most successful startups to get financing easier and cheaper than the parent company, since they won’t be saddled with the slowest and least profitable parts of the business. In this way, investors have the opportunity to invest their funds in the parts they like and avoid the ones they don’t, unlike the current situation”, says the expert.
“It seems like a coincidence that this happens just when Jack Ma seems comfortable coming back.”
“It seems like a coincidence that this happens just when Jack Ma seems comfortable coming back. To me, it suggests something that Alibaba has been wanting to do for a while, but has been waiting for the chance to do it,” Cole concluded.
“Unlock additional value. With this expectation, investors will be more positive towards Alibaba. It may reflect a new round of development for the business and reduce concerns about regulatory issues,” China Everbright Securities strategist Kenny NG told Reuters.
The news of the restructuring arrives a day after Alibaba founder Jack Ma was spotted at a Hangzhou primary schoolmarking her first public appearance in mainland China in over a year.
Ma left China at the end of 2021, just as authorities launched a regulatory crackdown on the country’s tech sector.
Ma’s stay abroad symbolizes the turnaround for China’s private sector, after its empire and tech industry came under regulatory crackdowns from Beijing.
The one who in his day was one of the most open businessmen in the country, withdrew from the public scene at the end of 2020 after criticizing China’s regulatory systemwhich was later blamed for triggering a broad regulatory crackdown by Beijing.
Ma, one of China’s best-known businessmen, left mainland China at the end of 2021 and has since been seen in photos in Japan, Australia and thailand. In addition, it is known that in recent days she had been visiting Uruguaywhere he evaluates investments in the meat industry.
Ma has also recently relinquished control of Ant Group, a Chinese fintech giant, in a review that seeks to draw a line under a broader regulatory crackdown.
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Source-www.infobae.com