(BFM Bourse) – The Chinese internet giant will split into six entities, some of which would be listed separately. This project is part of the largest restructuring in the history of Alibaba. The Wall Street-listed stock rose in early trade on Tuesday.
The Chinese internet giant Alibaba announced on Tuesday the largest restructuring in its history, by dividing the group into six entities, five of which can be listed separately, a welcome news on the stock exchange.
The group is a heavyweight in the Chinese tech sector, with activities in e-commerce, logistics, cloud computing (cloud computing), media, entertainment and artificial intelligence.
“The market is the best test, and each entity will be able to proceed with independent fundraising and an IPO when it is ready to do so,” group boss Daniel Zhang said in a letter to his employees. .
Wall Street welcomes the movement
Taobao, a very popular online sales platform in China, will continue to be 100% owned by the Alibaba Group. This restructuring will “create value for shareholders and stimulate market competitiveness”, assured in a press release Alibaba.
This is the “largest reshuffle in terms of governance in 24 years” of the group’s existence, which thus aims for a more “agile” organization, assured the Hangzhou-based company.
The six new entities will each have a CEO and a board of directors. Daniel Zhang will remain the CEO of the whole but also of the unit dedicated to cloud computing.
Alibaba’s listing in New York and Hong Kong will not be affected by the restructuring, the group said. In pre-opening on the New York Stock Exchange, investors applauded the announcement on Tuesday, causing the action to jump more than 9%.
Like other Chinese internet giants, Alibaba has been penalized in recent years by the Chinese government’s takeover of the tech sector.
The authorities had in particular derailed in 2020 a gigantic IPO in Hong Kong of its payment subsidiary Ant Group, while Alibaba was subsequently fined 2.3 billion euros for abuse of position. dominant.
Beijing seems to have loosened up since then and in early January the Chinese authorities finally gave the green light to Ant for a fundraising of more than one billion euros in Hong Kong.
In 2022, total revenue for Chinese internet companies fell just over 1% to 1.46 trillion yuan (196 billion euros), the first contraction in nearly a decade, data shows. from the Chinese Ministry of Industry and Information Technology.
heavy losses
On February 23, Alibaba announced an increase of only 2% over one year in its quarterly turnover, to 34 billion euros, a marked slowdown compared to the growth it had previously shown.
The group had cited in particular “weaker demand and disruptions in the supply chain and logistics linked to the impact” of the end of the policy of strict measures against Covid-19 in China.
In the previous quarter, Alibaba announced 2.7 billion euros in losses. The announcement of its restructuring comes as Alibaba founder, billionaire Jack Ma, made a rare public appearance in China on Monday, after several months abroad.
Jack Ma, who left the management of his group in 2019 to devote himself entirely to philanthropic activities, has been keeping a low profile for two and a half years after public criticism of the Chinese regulator. Since his media withdrawal in 2020, every piece of information concerning the billionaire and his travels has been widely commented on in China on social networks.
(With AFP)
SS – ©2023 BFM Bourse
Are you following this action?
Receive all the information about ALIBABA in real time: