Chinese Company Alibaba Plans To Spin-off Its Cloud Division Within One Year

Chinese largest e-commerce company Alibaba Group said on Thursday that it plans to spin off its cloud division Cloud Intelligence Group into a separate company within a year and conduct an IPO of its securities on the stock exchange

MOSCOW (UrduPoint News / Sputnik - 18th May, 2023) Chinese largest e-commerce company Alibaba Group said on Thursday that it plans to spin off its cloud division Cloud Intelligence Group into a separate company within a year and conduct an IPO of its securities on the stock exchange.

"We... are pleased to announce that our board has approved a complete spin-off of Cloud Intelligence Group through a distribution of stock dividends to shareholders, with the intention of making it an independent publicly listed company," the company's CEO, Daniel Zhang, said as quoted by the company in a statement.

He said that Alibaba will remain the holding company, while the division will become one of independent subsidiaries of the group. The company plans to complete the separation within 12 months.

In addition, the company's e-commerce division, which owns online marketplaces such as AliExpress, Lazada, Trendyol and others, plans to raise capital to finance entry into new markets, expand the customer and supplier base, technological improvements and other tasks. The unit is in talks with US banks to help with an initial public offering on US stock exchanges, media company Bloomberg reported on May 4, citing its sources.

Alibaba's logistics unit, Cainiao Network Technology Co. which intends to raise up to $2 billion in an IPO, expects to complete its initial public offering on the Hong Kong stock exchange within the next 12-18 months. Alibaba-owned grocery chain Freshippo, which is also preparing for an initial public offering on the Hong Kong stock exchange, is expected to complete its IPO from six months to a year, the company said.

In March, Alibaba announced a reorganization to spin off its different business lines. They would focus on cloud-based artificial intelligence, e-commerce, shipping, non-electronic services, digital business, and electronic media and entertainment. Alibaba's founder Jack Ma said that an IPO for each of these divisions would be possible on its own.

Alibaba Group is China's largest internet company operating in the field of e-commerce. It was founded by Jack Ma in 1999. The group owns several subsidiaries and online marketplaces: Alibaba Pictures, Alibaba.com, Aliexpress.com, Taobao.com, Tmall.com.