China’s Fosun in talks to sell $1.3b stake in Alibaba’s Cainiao

FILE PHOTO: A logo of Cainiao Smart Logistics Network Ltd is seen outside its industrial park in Jinhua, Zhejiang province, China March 29, 2017. Picture taken March 29, 2017. REUTERS/Stringer Reuters

Fosun International is in talks with Alibaba and others to sell a stake worth $1.3 billion in the e-commerce giant’s Cainiao, three people said, at a time when Alibaba has been increasing its holdings in the logistics affiliate.

Fosun, which owns resorts brand Club Med and controls French fashion house Lanvin among other assets, is looking to sell part or all of its 6.7% stake in Cainiao at a valuation of nearly $20 billion, two of the people said.

The once-acquisitive conglomerate has been talking to Chinese investment firms and companies, including Alibaba, over the past few months about the sale, and wants to use the proceeds for new investments in consumer and healthcare businesses, the two people said.

Alibaba is considering buying part of the stake from Fosun, one of the people said.

Alibaba paid 23.3 billion yuan ($3.29 billion) in November to raise its stake in Cainiao to 63% from 51%, implying a valuation close to 200 billion yuan ($28 billion) – a number confirmed by the three sources.

It also bought an equity interest from some unidentified existing shareholders in November, according to the first two people, at a valuation of $20 billion. Some discount for secondary share sales in private companies is common.

All three people who spoke to Reuters had knowledge of the potential stake sale but did not want to be named as the information was private.

Alibaba, Cainiao and Fosun declined to comment.

In 2013, Fosun had invested 500 million yuan as a co-founder of Cainiao, the logistics company that underpins delivery for Alibaba’s e-commerce marketplaces.

Cainiao raked in 22.23 billion yuan in revenue in the year ended March, up 49% from a year ago and accounting for 4% of Alibaba’s total revenue.

Alibaba first took overall control of the affiliate in 2017, lifting its stake to 51% from 47%, pledging to spend 100 billion yuan over five years to build out a global logistics network.

Fosun and other Chinese conglomerates have in recent years slowed their dealmaking following a crackdown by Beijing on flashy overseas acquisitions.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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